EU car group calls for urgent action on post-Brexit trade rules

Puzzle with printed EU and UK flags is seen in this illustration taken Nov 13, 2019. REUTERS/Dado Ruvic/Illustration/File photo

The European Union and Britain need to take urgent action to postpone rules for electric vehicles traded between the bloc and the UK that will trigger 10 percent tariffs, Europe’s car industry group said on Monday.

“Driving up consumer prices of European electric vehicles, at the very time when we need to fight for market share in the face of fierce international competition, is not the right move,” European Automobile Manufacturers’ Association (ACEA) president and Renault CEO Luca de Meo said in a statement ahead of a planned trade meeting between EU and UK officials this week.

Under the EU-UK post-Brexit trade deal, EVs need to have 45 percent EU or UK content from 2024, with a 50 perent-60 percent requirement for their battery cells and packs, or face British or EU import tariffs of 10 percent.

The problem is that neither carmakers in Britain nor the EU have built up their EV supply chains sufficiently to meet those requirements and have called for the rules to be postponed until 2027.

Stellantis has said British car plants will close with the loss of thousands of jobs unless the Brexit deal is swiftly renegotiated, while Ford has said it will slow the transition to electric.

The ACEA has said the rules could cost carmakers up to 4.3 billion euros ($4.57 billion) in tariffs and hit output.

So far, the EU executive has been reluctant to renegotiate the deal.

In June, Stefan Fuehring, a European Commission official overseeing the post-Brexit EU-UK trade agreement, said the EU rules of origin were “fit for purpose” and that the bloc was not considering changing them.

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