EU working on plan to delay tariffs on EV trade with the UK

The European Union is working on a plan that could delay the introduction of tariffs on electric vehicles shipped between the bloc and the UK, according to people familiar with the matter.

Under current post-Brexit arrangements, EVs traded between the UK and the EU will attract a 10% tariff from next year if less than 45% of their value comes from the region. European carmakers want to extend the planned phase-in period by three years, allowing more time for the region’s battery supply chain to develop. The industry has said the move could cost the sector €4.3 billion ($4.5 billion) over the next three years and would benefit Chinese competitors. The UK and many member states, including Germany, are in favor of the three-year delay. 

Under one of the proposals being discussed internally in Brussels, rules that determine what is made in Europe could be interpreted more loosely for a year, the people said. The people cautioned that a decision had not been taken yet. France has been opposing a delay.

The Financial Times first reported the discussions, citing an interview with European Commission vice president Maros Sefcovic.

Sefcovic told the FT that the EU wanted to solve the issue and was discussing it with the British government, and said he would be “very happy” if a deal could be reached before the deadline at the end of this year.