The European Automobile Industry Association stated on Monday that urgent action is required between the EU and the UK to delay regulations for electric vehicle trade between the EU and the UK that will result in 10% tariffs.
Before a trade addressing between EU and United Kingdom officials this week, Luca de Meo, CEO of Renault (RENA.PA), said in a statement that “operating a up the consumer cost of European electric cars, at a moment when we must compete for share of the market in the midst of fierce rivalry worldwide, is not the right move.”
According to the Europe-UK post-Brexit trade agreement, EVs must contain 45% EU or UK composition starting in 2024, with a requirement of 50%–60% of their lithium-ion batteries and groups, or face 10% import duties from the EU or the UK.
The issue is that neither the EU nor British automakers have sufficiently developed electric vehicle (EV) supply chains to satisfy those demands, leading them to request a postponement of the regulations until 2027.
Unless the Brexit agreement is promptly renegotiated, Stellantis (STLAM.MI) and Ford (F.N) claim that British auto manufacturing will shut down, costing thousands of jobs. Ford has also stated that it will halt the move to electric vehicles.
According to the ACEA, the regulations might increase tariffs for automakers by up to 4 billion euros ($4.57 billion) and reduce output.
The European Union executive has so far been hesitant to rework the agreement.
Stefan Fuehring, a representative of the European Commission in charge of the post-Brexit trade deal between the EU and the UK, stated in June that the EU’s origin requirements were “fit to service” and that the union was not considering modifying them.