SMMT calls for delay to new ‘rules of origin’ laws which could see price of an EV rise by £3,400

  • New post-Brexit rules ‘could add £3,400 to electric car price tags’ – SMMT
  • Trade body calls on UK and EU to postpone the implementation of tougher rules of origin requirements
  • Suggestion supported by Auto Trader which says delay would be a ‘significant’ step

Time 9:06 am, October 18, 2023

The SMMT has warned that tough new post-Brexit legislation could see the price of a new EV rise by £3,400 next year.

Starting in January, strict ‘rules of origin’ requirements will be placed on EV batteries, which will see tariffs slapped on electric cars.

Tariffs of 10 per cent are due to be imposed on exports of electric cars between the UK and EU from January 1 if at least 45 per cent of their value does not originate in either the UK or EU.

The SMMT estimates the tariffs could result in an average price rise of £3,400 on EU-manufactured battery electric vehicles bought in the UK.

Nearly half (49 per cent) of a BEVs bought in this country come from the EU and the trade body is now calling on the new laws to be delayed amid an ongoing cost-of-living crisis.

Bosses say that charges motorists extra to go electric would lead to EV uptake stalling ahead of the delayed petrol and diesel ban in 2035.

They are therefore calling for a three-year delay in implementing the new rules as ‘a pragmatic solution’ which would  allow time for European battery production to ramp up.

Speaking before an SMMT virtual global trade conference, the organisation’s chief executive Mike Hawes said: ‘UK automotive is a trading powerhouse delivering billions to the British economy, exporting vehicles and parts around the world, creating high value jobs and driving growth nationwide.

‘Our manufacturers have shown incredible resilience amid multiple challenges in recent years, but unnecessary, unworkable and ill-timed rules of origin will only serve to set back the recovery and disincentivise the very vehicles we want to sell.

‘Not only would consumers be out of pocket, but the industrial competitiveness of the UK and continental industries would be undermined.

‘A three-year delay is a simple, common-sense solution which must be agreed urgently.’

Delay would be ‘significant and much needed step’

Among the firms to back a delay has been Auto Trader, which says pushing the measures back would be ‘significant’.

The automotive powerhouse says that charging people extra to go green is the ‘the last thing the road to zero needs’.

Ian Plummer, commercial director of Auto Trader, said: ‘With new electric cars on average a third more expensive than petrol and diesel counterparts, the last thing the road to zero needs is extra demands on peoples’ pockets.

‘A delay to the extra charges is a significant and much needed step the political sphere can take to help with mass electric adoption.’

A government spokesperson added: ‘We need a joint UK-EU solution to avoid consumers facing tariffs on electric vehicles from 2024 which do not apply to petrol and diesel cars.

‘We have raised this with the European Commission and industry and are ready to work with them to find a solution within the existing structure of the Trade and Cooperation Agreement. The UK remains one of the best locations in the world for automotive manufacturing.’

Jack Williams's avatar

Jack joined the Car Dealer team in 2021 as a staff writer. He previously worked as a national newspaper journalist for BNPS Press Agency. He has provided news and motoring stories for a number of national publications including The Sun, The Times and The Daily Mirror.

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