It seems for quite a while now that both the European Automobile Manufacturers’ Association (ACEA) and the Society of Motor Manufacturers (SMMT) are asking for the rules of origin exemption to be extended.
Under the TCA 40% of the content of EV’s and 30% of batteries must originate from the EU or UK from Jnuary 2024 and January 2027, this then increases to to 45% of the vehicle and 50-60% of batteries or face a 10% import tariff on cars coming into the EU or UK.
The ACEA has warned the EU sends far more cars to the UK than the other way round, and would therefore pay more and that the EU has slightly increased market share since Brexit to about 47 per cent. In 2022, it exported 139,000 electric vehicles to the UK worth €5.1bn — which would amount to €510mn in tariffs once they kick in. But the ACEA predicts a big increase in exports to the UK as binding targets on manufacturers for zero emission vehicle sales begin in Britain next year.
The Acea argues that the industry needs more time to wean itself off batteries that are still imported from China, South Korea or Japan — despite a push to build factories in Europe.
“Money is being spent to support electrification and the building of a European supply chain is accelerating. But it needs time. We have all been too optimistic,” Sigrid de Vries, director-general of Acea, told the Financial Times. “We are not asking to change the TCA . . . we just need more time.”
Mike Hawes, chief executive at UK automotive trade body the SMMT, said: “Rules of origin agreed in the UK-EU TCA must work for all parties and the UK and EU face challenges in ensuring there is adequate domestic battery production to meet the terms agreed.
“Given the unprecedented global turmoil since the TCA was signed, the EU and UK should look urgently at battery manufacturing capabilities across Europe and assess the risk of crippling tariffs on electrified vehicles being applied, affecting both sides, in little over a year at just the time we need to increase take up of these zero emission models.”
The ACEA, has also said China would be the biggest beneficiary if the EU does not agree to a British request to push the changes back from 2024 until 2027 ans supported by EU carand van manufacturers.
Maroš Šefčovič, the EU commissioner responsible for UK relations, said in May that the bloc would not budge because it wanted to encourage carmakers to invest in domestic battery-making capacity. But he has asked Acea to submit evidence of the likely damage to the industry.
The European commission has also said it had “taken note of ACEA’s estimates” but defended the TCA rules as a means to “develop a strong and resilient battery value chain in the EU”, according to a spokesperson. “Any issues regarding the TCA and its operation can be raised by either side in the bodies that were set up by the TCA.”
Sources FleetNews & FT ⬆⬆
kezo ➡ It seems there is a sparkle of hope on the horizon when the unelected commission wake up and realise the measures of the TCA will be more punnative to EU manufacturers importing into the UK and will open the door further to China. Will common sense prevail, who knows!
