Post-Brexit regulations requiring European automakers to buy more electric vehicles from the United Kingdom or the European Union may cost them up to 4.3 billion euros ($4.7 billion) in tariffs and reduce output, according to a prominent industry association on Tuesday.
Electric cars will be required to include 45% EU or UK content beginning in 2024, with a 50-60% threshold for battery cells and packs, or face 10% British or EU import duties.
The European Automobile Manufacturers’ Association (ACEA) requested for a three-year delay in the requirements on Tuesday, stating that more time was required to build up Europe’s battery capacity.
For the time being, automakers must rely on battery cells and supplies supplied from Asia.
It calculated that under the new regulations, European firms would have to pay the UK government 4.3 billion euros in tariffs over three years.
Because the United Kingdom accounts for about a quarter of EU electric car exports, this might reduce EU manufacturing by up to 480,000 units.
ACEA wrote to the European Commission earlier this month, requesting a revision of battery origin standards and a three-year delay with Britain.
Its members predicted that just 10% of electric vehicles will comply with the new requirements by 2024, leaving EU manufacturers vulnerable to competition from China and other third countries.
Stellantis (STLAM.MI) warned last month that if the Brexit deal is not renegotiated quickly, British auto manufacturing might collapse.
According to the European Commission, the regulations are intended to assist the development of a strong battery value chain in the EU, and Brexit has transformed the commercial relationship with Britain.
Last week, Stefan Fuehring, a European Commission official in charge of managing the post-Brexit EU-UK trade pact, told a conference that EU origin regulations were “fit for purpose” and that the EU was not considering modifying them./Reuters
($1 = 0.9160 euros)
