Carmakers warn time running out on post-Brexit EV tariff delay

Europe’s main auto lobby group redoubled efforts for the European Union to delay incoming post-Brexit tariffs on electric vehicles in a letter to Commission President Ursula von der Leyen . 

The European Commission has taken “no action” yet to extend the phasing-in of tariffs on EVs traded between the bloc and the UK, due to take effect in January, the European Automobile Manufacturers’ Association wrote and signed by top executives including Volkswagen, BMW and Renault. 

“With weeks to go before an end-of-the-year trading cliff-edge, the situation becomes more urgent by the day,” ACEA President and Renault SA Chief Executive Officer Luca de Meo, ACEA director general Sigrid de Vries and 12 other top executives wrote in the letter obtained by Bloomberg News. “A large majority of member states have already expressed a willingness to support our position.”

Under current arrangements, EVs traded between the EU and UK starting next year would be subject to a 10% tariff if less than 45% of their value comes from the region. The lobby group said 90% of EV exports to the UK would be hit by the extra duty, and could cost the sector a total of €4.3 billion ($4.6 billion) while benefiting Chinese competitors.

The UK government and European carmakers are pressing to extend the phase-in period for tariffs by three years, backed by many EU member states including Germany. That possibility remains on the table, Bloomberg reported this month. France has been opposing a delay.

“To be clear, ACEA only asks for short-term flexibility in the rules,” the letter said. “We do not contest that they will become more restrictive in due course, it is simply a question of timing” and a three-year delay would be the “most appropriate solution.”

Electric vehicles have become a major focal point of global trade tensions in recent weeks as Europe frets that its automakers will lose out to Chinese manufacturers in the transition to less polluting cars. The EU last month launched an investigation of Beijing’s financial support for the EV industry.