Ford, Volkswagen and BMW ask Europe for delay to ‘cliff-edge’ post-Brexit tariffs
Chief executives at a slew of Europe’s leading carmakers have written to the president of the European Commission, calling for an “urgent” delay to looming post-Brexit tariffs on electric vehicles.
A letter signed by 13 manufacturers, including Ford, Ferrari, Volkswagen and BMW, has called for a “temporary amendment” to the UK-EU Brexit deal to push back so-called ‘rules of origin’ tariffs set to be introduced in January.
Under the arrangements, a 10 per cent tariff will be added to any electric car traded across the Channel, which fails to source nearly half of its value from inside the UK or European Union (EU).
Automakers across the continent have warned repeatedly that the introduction of the rules would slow the transition away from fossil fuel vehicles and could see UK factories shut. The UK government has backed amendments to the deal in order to address problems raised by the companies.
“At this critical juncture in our industry’s green transformation, the application of unachievable
rules of origin will have significant direct consequences in terms of a potential loss of EV
manufacturing output in Europe,” the letter, addressed to Ursula Von Der Leyen, reads.
“At this critical juncture in our industry’s green transformation, the application of unachievable rules of origin will have significant direct consequences in terms of a potential loss of EV manufacturing output in Europe.”
Letter from European carmakers to Ursula Von Der Leyen
Other signatories included bosses at Jaguar Land Rover, Toyota, Mercedez-Benz, Renault and Volvo Group, all of which have significantly ramped up spending on electrification in recent years.
The letter warned: “If things stay as they are, 90 per cent of our EV exports to the UK will be subject to tariffs next year, leading inevitably to lost market share to global competitors and lost EV production in the EU.”
It comes amid rising concern over the influx of Chinese electric carmakers into Europe, whose cut-throat low prices have threatened traditional competition in the bloc.
Seat and Cupra chief executive Wayne Griffiths told City A.M. yesterday that “perfect storms” lay ahead for European automakers.
The letter, which was arranged by trade body the European Automobile Manufacturers’ Association, added that “losing the UK market to global competitors” would delay “economies of scale needed to make EV production in the EU profitable”.
Battery production remains one the most pressing issues, particularly in the UK. The government has been pushing hard for more gigafactories following the collapse of Britishvolt in January.
The European Commission was approached for comment.