A lack of understanding between the United Kingdom and the European Union on Northern Ireland could lead to tariffs on the price of imported electric cars, the head of the Association of British Manufacturers has warned.
“I don’t think there is any market or country in Europe that wants to see electric vehicles become more expensive, but this will be the result if it is not addressed,” said the executive chairman of the Association of Vehicle Manufacturers and Traders. SMMT), Mike Hawes, in a press conference to announce the annual results.
At issue are the rules of origin set out by the post-Brexit trade and cooperation agreement on cars, particularly for components in electric vehicles and their batteries.
From 2024 to 2027, the percentage of non-permitted parts will be gradually reduced, as manufacturers are forced to increase the use of parts and materials produced in their respective countries, which avoids paying tariffs on the final product, which can be up to 10%. .
Haves explained, “The battery industry has not been able to invest and expand production quickly enough to allow the automotive industry to meet these needs with locally sourced batteries.”
“Now we have to find a solution, because most vehicles don’t meet that requirement,” he underlined.
Although relations between London and Brussels, particularly in the British province of Northern Ireland, have been strained in recent weeks due to the impact of Brexit.
The SMMT chief hopes that a solution to the impasse will lead to “improved trust and cooperation” that will unlock the issue that threatens the auto industry.
Both the UK and the EU predict that sales of new combustion engine vehicles will end in 2035.
“At a time when governments want markets to move towards electric vehicles, they face the risk of imposing additional costs on these same vehicles,” he stressed.
According to the SMMT, the EU is the main market for cars produced in the UK, accounting for 57.6% in 2022, and the main supplier of vehicles registered in the country at 62.8%.