EU urged to delay Brexit trade rules to save car industry from £3.6bn black hole

Brussels has been urged to delay Brexit trade rules to save the car industry and prevent hundreds of job losses.

The EU is being encouraged to extend zero-tariff trade rules on electric cars to prevent costs from spiralling.

If zero-tariff rules aren’t continued, new tariffs could lead to an extra £3.6billion in costs and reduce the production of 480,000 electric cars for European car manufacturers.

The trade deal agreed in 2020 included a phased tariff clause which excluded electric cars from tariffs until 2024.

However, the car industry is behind on battery targets and is asking for more time to increase its battery production.

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Unless the European Commission changes its mind, from January 1, 2024, all electric cars which are less than 45 percent built in the UK or EU will have a 10 percent tariff.

This extra cost will have a dramatic impact on customers who could see the price of a new electric vehicle rise significantly to make up for the tariff.

As a result, manufacturers from both the UK and EU are calling for the new rules to be pushed back to 2027.

In a statement, the chief executive of Renault and president of the European Automobile Manufacturer’s Association (ACEA) Luca de Meo said: “Driving up consumer prices of European electric vehicles at the very time when we need to fight for market share in the face of fierce international competition is not the right move.”

Mr de Meo added: “We will effectively be handing a chunk of the market to global manufacturers. Europe should be supporting its industry in the net-zero transition as other regions do — not hindering it.”

In response, the Times reported that a European Commission official said: “This is a treaty that was negotiated over a long period and it is politically sensitive. Changing this treaty is not a straightforward ask.”

Speaking to the publication, Joel Reland suggested that for the Commission, trade with the UK may not be a top priority issue.

He explained: “[N]et zero transition and China’s dominance of green technology are top-priority issues for the rest of the decade. Trade with the UK is not.”

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Mr Reland added: “Therefore, it seems willing to accept tariffs on electric exports to the UK as collateral damage in its quest to upscale EU-based manufacturing.”

On whether the deal could be renegotiated. Reclaim MP Andrew Bridgen told the Express that he thought it could.

He said: “Anything can be renegotiated if there is the will to do so. Our Brexit agreement should not be set in stone but modified to accommodate new technologies and new products.

“It appears that some in the EU want to play hardball to punish the UK for leaving even if this damages the EU in the process.”

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