EU approves three-year grace period for EV tariffs in UK trade

European Union member states approved a three-year postponement of tariffs on electric vehicles traded with the UK, giving carmakers more time to make necessary changes to comply with local content requirements under a bilateral trade deal. 

The tariffs that were set to kick in from next year would have charged a 10% duty on vehicles and batteries traded between the bloc and the UK if less than 45% of their value comes from the region - a policy meant to strengthen the European battery supply chain. 

The car industry as well as the UK and many EU member states had argued for a delay of the measure, saying that the cell supply is not currently up to speed. 

The three-year grace period is meant to give the industry sufficient time to expand battery production in the region, according to a statement. The EU’s executive arm will provide €3 billion ($3.2 billion) funding of under the Innovation Fund to support the expansion. The delay will have to be confirmed by the EU-UK Partnership Council before the end of the year.