UK carmakers seek two-year delay to EU electric vehicle tariffs

The UK car industry plans to press the EU for a two-year delay to tariffs on electric vehicles traded between the two sides. The tariffs could begin on 1 January if the UK and EU do not agree to postpone battery rules of origin, potentially raising costs for carmakers and disrupting trade while local battery production remains limited.

Under the 2020 Brexit deal, electric cars must use batteries made in the UK or EU with locally sourced materials to avoid a 10% tariff. The rules were first delayed in 2023, but many new battery plants are not yet producing enough, leaving manufacturers reliant on imports from China, Japan and South Korea. The European Commission has floated proposals understood to amount to about a one-year delay; the issue may feature at an EU-UK summit next week. The manufacturers’ group ACEA estimates that 82% of EU electric car and van exports to the UK would face the duty in 2027, adding €1.47bn (£1.23bn) in costs next year alone.