EU endorses three-year delay for increased car tariffs

Industry News | | MIC Customs Solutions |

The EU has announced a three-year delay to new automotive tariffs after pressure from industry bodies and national governments.

The European Union has accepted calls from the automotive industry for a three-year delay on the introduction of new tariffs on battery electric vehicles (BEVs) that were scheduled to come into force next month.

It had been set to implement duties of ten percent on vehicles shipped from the UK to the EU and vice-versa under new post-Brexit regulations that set tougher rule of origin requirements for battery technology.

Despite strong objections to the new rules from industry groups and the UK government, the EU had until recently been unwilling to accept a delay, with some member states concerned that it would be a breach of the post-Brexit Trade and Cooperation Agreement.

However, this week, Brussels has performed a U-turn and acknowledged that a "one-off extension" is necessary in order to give the industry sufficient time to develop UK and EU supply chains for EV battery components .

The decision was formally adopted on Wednesday (December 6th), with European Commission (EC) vice-president Maroš Šefčovič telling reporters in Brussels: “We have decided to propose a one-off extension until December 31th, 2026 of those rules currently in force.”

Although it still requires approval from member states, this is understood to be a formality and will give the industry room to develop local battery production facilities. To assist with this, the EC has also approved €3 billion in funding over the next three years to help boost European battery manufacturers.

The news was welcomed by the automotive sector, with director general of the European Automobile Manufacturers’ Association Sigrid de Vries saying: “Failure to approve the proposal would result in reduced competitiveness of our exports. It would also have a negative knock-on impact on demand for European batteries and battery materials, based on lost BEV market share to third-country competitors.”

Mike Hawes, chief executive of the UK's Society of Motor Manufacturers and Traders, also praised the "pragmatic solution", and urged all parties in the EU to get behind it.