Looming post-Brexit tariffs will cost Brits buying electric cars an extra £3,400
Post-Brexit tariffs on electric vehicles (EVs) will cost British consumers an extra £3,400 from next January, new industry calculations show.
The so-called rules of origin fee will come into force in January 2024, adding a 10 per cent tariff on any electric car which fails to source nearly half of its value from inside the UK or European Union (EU).
The new tax, which applies to any electric models traded across the Channel, will result in a combined cost of £4.3bn to the industry between 2024 and 2026, according to trade body the Society of Motor Manufacturers and Traders (SMMT).
European buyers will see a slightly larger price hike than Brits, with the value of UK-made battery electric vehicles sold in Europe rising by £3,600.
Mike Hawes, SMMT chief executive, said “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.”
The incoming tariffs have sparked uproar from the automotive industry this year, amid backlash against the UK government for failing to keep pace in the global race to transition to EVs.
A lack of home electric battery manufacturing capacity, critical for meeting the rules of origin requirements, has been a key issue and made all the more prescient following the collapse of Britishvolt in January.
In May, Vauxhall owner Stellantis warned that it would have to close factories in the UK without changes to the Brexit deal.
Jaguar Land Rover and Ford have also been outspoken in their criticism of the new rules, with the latter describing the levy as a “pointless cost.”
The SMMT said the tariffs would incentivise the purchase of petrol guzzling vehicles and were “agreed before the pandemic, war in Ukraine” and shortages in the supply of semiconductors pummelled the industry.
Its fresh warnings came alongside a report into the UK’s global automotive trade, which showed the electrified segment had more than doubled in the last three years to £15.3bn since the signing of the EU-UK Trade and Cooperation Agreement (TCA).
The body is anticipating the UK’s total automotive trade, which covers finished vehicles and components, to be worth over £100bn by the end of 2023.