Europe’s Automakers Laud EU/U.K. Electric Battery Tariff Extension

Europe’s Automakers Laud EU/U.K. Electric Battery Tariff Extension  Forbes

Europe’s Automakers Laud EU/U.K. Electric Battery Tariff Extension

Europe’s Automakers Secure Three-Year Extension for Electric Car Battery Rules of Origin

The European Commission and the British government have reached an agreement in principle to extend the rules of origin for electric car batteries for three years. The deal is pending formal approval from the EU Council of Ministers.

Impact on Tariffs and Prices

  • If no deal was reached, a 10% tariff would have been imposed starting January 1, resulting in an extra average cost of £3,400 ($4,300) per electric vehicle for UK citizens.
  • EU buyers of British-made battery electric vehicles would have faced an average increase of £3,600.

The extension of the rules of origin prevents these additional costs from being imposed.

Benefit for Chinese Companies

Chinese companies would have been the major beneficiaries, as they currently enjoy a 30% price advantage.

Support from European Automobile Manufacturers Association (ACEA)

The ACEA, representing the EU auto industry, has welcomed the proposed deal and urged the Council of Ministers to approve it. The ACEA emphasizes the importance of this deal for the well-being of EU battery electric vehicle (BEV) manufacturing and the entire European battery value chain.

Concerns from France and Stellantis

During the negotiations, France expressed concerns about the delay, fearing that it would give the UK an unfair advantage in its withdrawal from the EU. Stellantis, a major automotive company, had threatened to shut down its British plants if the extension was not agreed upon.

Reasons for the EU’s Leniency

The EU’s leniency towards the UK in this matter is seen as a strategic move to present a tough front to China. China is currently under investigation for unfair subsidies on its electric cars sold in the EU. By supporting the European car industry and offering new subsidies alongside the tariff-free extension, the EU aims to defend its economic interests and strengthen its position in upcoming discussions with Chinese leaders.

Upcoming China-EU Summit

A China-EU summit will be held on December 7 in Beijing, where leaders from both sides will discuss strategic and global economic issues of common interest.


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