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Picture: SUPPLIED
Picture: SUPPLIED

London — The EU is reticent about agreeing to Britain’s plea to postpone looming tariffs on the sale of electric vehicles (EVs) but carmakers remain optimistic that a delay can be agreed on, the UK’s vehicle industry body said on Monday.

Under the Brexit trade deal, the sale of EVs between the UK and the EU will attract 10% tariffs from January, unless 45% of the value of the vehicle comes from Britain or the EU under so-called “rules of origin”.

With many EV batteries imported from China, the tariffs would hit vehicle makers both in Britain and the EU and could lead to higher EV prices for consumers, hindering efforts to cut carbon emissions.

Several major car companies have warned that their UK car plants will become uncompetitive if the tariffs go ahead. Stellantis, the world’s number three carmaker by sales and the owner of the Vauxhall, Peugeot, Citroën and Fiat brands, has said UK car plants will close if a deal cannot be agreed.

“Clearly, there has been some reticence or nervousness in Brussels about whether this is something that they would be willing to accept,” Society of Motor Manufacturers and Traders (SMMT) CEO Mike Hawes said in an interview, of Britain’s call to postpone the tariffs until 2027.

Hawes said the question of the French government's position on the issue remained unclear, after recent media reports that Germany was in favour of a tariff waiver.

“I suppose there is a nervousness about reopening something [in the Brexit deal] … and if you reopen one bit, does that open it up for the rest? But in this case, it’s just about EVs,” he said.

A European Commission spokesperson said the Brexit deal was the outcome of negotiations in which Britain and the EU agreed to an “overall balance of commitments,” but noted that issues raised by either side could be examined by bodies set up by the deal.

If an agreement is not reached, carmakers would work to ensure their vehicles did not become uncompetitive because of tariffs, Hawes added.

At a media briefing earlier on Monday, he said the industry remained optimistic about an agreement.

“It makes common sense because the last thing you want to do is put additional tariffs on the very vehicles you're encouraging people to buy.” 

Reuters

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