The lack of understanding between the United Kingdom and the European Union on Northern Ireland could lead to an increase in the price of imported electric cars due to the application of tariffs, warned the leader of the association of British manufacturers.
“I don’t think there is any market and country in Europe that wants electric vehicles to become more expensive, but that will be the result if this is not solved,” said the executive president of the Association of Manufacturers and Traders of the Automotive Sector (SMMT). , Mike Hawes, in a meeting with journalists regarding the publication of the annual results.
What is at stake are the rules of origin for car components, in particular electric vehicles and their batteries.stipulated by the post-Brexit Trade and Cooperation Agreement.
From 2024 to 2027, the percentage of non-originating components allowed will be gradually reduced, forcing manufacturers to increase the use of parts and materials produced in their respective countries to avoid paying a duty on the final product, which could reach up to 10 % .
Hawes explained that “the battery industry has not been able to invest and expand production fast enough to allow the auto industry to meet these requirements with locally sourced batteries.”
“Now we need to find a solution because the reality is that most vehicles will not meet that requirement” of the rules of origin, he stressed.
Relations between London and Brussels have been strained due to the impact of Brexit, particularly in the British province of Northern Ireland, although progress has been made in recent weeks.
The SMMT leader believes a solution to the deadlock will result in a “better spirit of trust and cooperation” that could unlock a problem threatening the auto industry.
Both the UK and the EU foresee an end to the sale of new combustion engine vehicles by 2035.
“At a time when governments want markets to move towards electric vehicles, at the same time they face the risk of additional costs being imposed on these same vehicles,” he stressed.
According to SMMT, the EU is the main market for cars produced in the United Kingdom, with 57.6% in 2022, and the main supplier of vehicles registered in the country, with 62.8%.