Industry Warning on EU Trade Barriers
The UK motor industry has warned that new European Union rules on electric vehicles and batteries could effectively shut out British car manufacturers from the European market. The warning comes from the Society of Motor Manufacturers and Traders (SMMT), which represents the UK automotive sector.
Strict Rules of Origin
Under the post-Brexit trade deal, cars traded between the UK and the EU must meet strict rules of origin requirements to avoid tariffs. From 2024, electric vehicles will need to have 45% of their content from the UK or the EU to qualify for zero-tariff trade. For batteries, the threshold is 70%.
The SMMT says that UK carmakers are unlikely to meet these thresholds because the UK lacks a domestic supply chain for batteries and electric vehicle components. This could lead to tariffs of 10% on UK-made cars exported to the EU, making them less competitive.
Call for Government Action
Mike Hawes, chief executive of the SMMT, said: "The UK automotive industry is facing a cliff-edge. Without urgent government action to boost battery production and supply chains, we risk losing our place in the European market." The SMMT is calling for the government to invest in battery gigafactories and negotiate an extension of the rules of origin transition period.
Impact on Jobs and Investment
The warning comes as the UK car industry is already struggling with the transition to electric vehicles. The SMMT estimates that the UK needs at least three large-scale battery factories by 2030 to meet demand. Without them, the industry could lose billions of pounds in investment and tens of thousands of jobs.
A government spokesperson said: "We are working closely with the industry to ensure the UK remains a world leader in electric vehicle manufacturing. We have already committed £500m to support the development of battery supply chains."
