\n<\/p>\n
The EU and UK car industries are urging the European Commission to adjust the Brexit trade deal and suspend, for a second time, tariffs on imports of electric vehicles.<\/p>\n
They have expressed concerns that they will not be able to meet the conditions set for 1 January 2027 for tariff-free sales. This is because of strict rules of origin over what products can qualify for tariff-free trade under the EU-UK Trade and Cooperation Agreement which has applied since 2021.<\/p>\n
Under the 2020 Brexit deal, 55% of a car\u2019s value had to be made in Europe by 1 January 2027 to avoid tariffs, but 70% of the battery pack and 65% of the battery cell also had to be made in Europe.<\/p>\n
It was originally envisaged that 30% of battery packs and battery cells would be made in the EU or the UK within years of the deal \u2013 with the rules of origin regime incentivising investment in domestic battery manufacturing. By 2023, it was clear this was not the case, partly because of Covid and partly because of shortages of semiconductors caused by Russia\u2019s invasion of Ukraine.<\/p>\n
Under mounting pressure from the car industry, the European Commission agreed to suspend the rules for three years until the end of this year.<\/p>\n
But with seven months to go, the industry has told the commission that it cannot meet the \u201cmade in Europe\u201d battery targets this time either.<\/p>\n
Jonathan O\u2019Riordan, international trade director at ACEA, the European Automobile Manufacturers\u2019 Association, said the industry had forecast that 60% of batteries across all segments, from cars to trucks, would be made in Europe by 2027 when the tariff schedule was first suspended in 2024.<\/p>\n
It is now estimated that by 1 January 2027 \u201cjust under 20%\u201d of batteries will be made in the EU, said O\u2019Riordan.<\/p>\n
In the UK, the level is higher, but still below targets, according to industry estimates. It comes amid fears that EU-UK talks have lost momentum with no date yet for the summit originally planned for May.<\/p>\n
In Brussels on Friday, ACEA\u2019s director general, Sigrid de Vries, said \u201cthe battery drive train development in Europe was far too slow\u201d and they needed to see a \u201cpolicy shift\u201d at the European Commission to accelerate the transition.<\/p>\n
Mike Hawes, chief executive of the UK\u2019s Society of Motor Manufacturers and Traders (SMMT), said: \u201cBattery supply chains are still not ready to meet these stringent requirements, which were based on assumptions that have not materialised despite major investment.\u201d<\/p>\n
He added: \u201cThe UK and EU must now find a pragmatic solution that avoids self-defeating tariffs on the very vehicles consumers are being urged to buy, while safeguarding investment in domestic battery capabilities.\u201d<\/p>\n
Struggles in the EU and the UK to ramp up battery production have not just been hampered by the stranglehold China has on critical raw materials, including lithium and the refined version needed for battery cells.<\/p>\n
\u201cThe cost of battery manufacturing is very high, still 30% higher than in China,\u201d said O\u2019Riordan.<\/p>\n
While the European Commission has introduced several laws to help promote production, setting up local industry is costly and time-consuming.<\/p>\n
To get from opening a mine to producing battery-grade lithium can take several years. \u201cTo open up a mine and build a fully fledged production chain \u2013 that\u2019s maybe $750m,\u201d Stefan Scherer, the boss of Europe\u2019s only lithium factory, has said.<\/p>\n
Hawes said: \u201cWith wider geopolitical pressures and the EU\u2019s \u2018Made in Europe\u2019 push adding further strain, both sides must lock in a bilateral commitment that protects our long-term automotive partnership and Europe\u2019s wider competitiveness.\u201d<\/p>\n
A spokesperson for the European Commission said: \u201cDiscussions on these and related topics can take place within the framework of ongoing EU-UK negotiations\u201d, adding that it was \u201cin constant contact with stakeholders\u201d in the EV sector \u201cto assess their preparedness to meet the rules of origin\u201d.<\/p>\n
The industry\u2019s pleas come amid fears that over-production in China and the favourable exchange rate is causing a series of rolling crises for manufacturing and will ultimately lead to cannibalisation of European industry.<\/p>\n
European leaders will meet on 18 June and China is one of the items on their agenda.<\/p>\n
Get in touch<\/p>\n
If you have something to share about this story, you can contact Lisa using one of the following methods:<\/p>\n
The Guardian app has a tool to send tips about stories. Messages are end to end encrypted and concealed within the routine activity that every Guardian mobile app performs. This prevents an observer from knowing that you are communicating with us at all, let alone what is being said.<\/p>\n
If you don\u2019t already have the Guardian app, download it (iOS\/Android) and go to the menu. Select \u2018Secure Messaging\u2019.<\/p>\n
To send a message to Lisa O\u2019Carroll please choose the \u2018Business (UK and Global)\u2019 team.<\/p>\n
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Finally, our guide at theguardian.com\/tips\u00a0lists several ways to contact us securely, and discusses the pros and cons of each.\u00a0<\/p>\n
<\/span>Show more<\/p>\n","protected":false},"excerpt":{"rendered":" The EU and UK car industries are urging the European Commission to adjust the Brexit trade deal and suspend, for a second time, tariffs on imports of electric vehicles. They have expressed concerns that they will not be able to meet the conditions set for 1 January 2027 for tariff-free sales. This is because of<\/p>\n","protected":false},"author":1,"featured_media":50150,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[4291,5615,1495,7350,1545,1961,72],"class_list":{"0":"post-50149","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-automotive","9":"tag-brexit","10":"tag-car","11":"tag-delay","12":"tag-industry","13":"tag-pressing","14":"tag-tariffs"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/50149","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=50149"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/50149\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/50150"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=50149"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=50149"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=50149"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}