UK (Commonwealth) _ The imposition of tariffs on the sale of electric vehicles between the United Kingdom and Europe will be postponed for three years, as demanded by the European Union.
The agreement, which Brussels is set to ratify on Wednesday, might increase sales of electric vehicles (EVs) by keeping the cost of EVs low enough for regular drivers to buy and trade in their gasoline or diesel-powered cars.
The Society of Motor Manufacturers and Traders (SMMT) of the UK issued a warning earlier, saying that “if these regulations are not delayed, EVs traded both ways will face taxes that could increase rates for consumers at a crucial point in the transition [aside of petrol engines].”
In order to maintain customer choice and affordability, automakers and governments from both sides of the Channel have advocated for a reasonable extension of the present EV battery regulations by an additional three years.
EVs sold between Britain and Europe will be subject to an additional 10% levy under an existing post-Brexit agreement that will take effect on January 1st if less than 45% of their value originates from either region. The agreement aimed to promote the growth of Europe’s battery supply chain and assist the area in achieving its environmental targets through the decarbonization of transportation.
However, automakers in the UK and the rest of Europe have been pressuring lawmakers to push out the legislation until 2027, citing concerns that the supply chains were not yet ready to support a large enough increase in domestic manufacturing.
The Financial Times reports that the plan will be approved by the European Commission on Wednesday, after which individual EU governments must ratify it.
Both sides of the Channel’s automakers said that the levies would damage regional businesses, impede the growth of battery factories, and potentially cost the automotive industry €4.3 billion (£3.7 billion). They cautioned that since the Chinese EV manufacturers receiving subsidies would be able to increase their market share, they would be the only winners.
According to estimates from the SMMT, tariffs may cause the average cost of pure battery electric cars made in the EU and purchased in the UK to increase by £3,400. Approximately 50% of these vehicles that UK consumers purchase are imported from the EU. They calculated that an EV built in the UK and shipped to Europe would cost a further £3,600.
According to recently revealed SMMT data, the market share of new pure battery electric cars was 15.6% last month, compared to 20.6% a year earlier when sales spiked owing to a high volume of deliveries.
Company fleet purchases of new vehicles drove growth, with registrations rising by 25.4%. Private purchasers’ demand decreased. Fleet purchases of the newest and greenest new cars are driving the recovery of the British new car industry, according to SMMT CEO Mike Hawes.
According to him, private EV purchasers require incentives that are comparable to those that have effectively prompted commercial adoption as well as reasonable trade regulations that support rather than hinder the shift.
November saw a 9.5% increase in new automobile registrations in the UK, only 0.1% less than pre-pandemic levels. The most recent SMMT statistics show that 156,525 new automobiles were registered last month, an increase from 142,889 in November 2022.
The automotive sector in the UK and Europe, which is finding it difficult to attract customers for EVs in the expected numbers, will be pleased to hear the news from the EC. The automakers in Europe, including those in the UK, are eager to employ batteries that are produced nearby, but they claim that setting up production facilities has taken longer than anticipated.
China has effectively cornered the market, producing 70% of the lithium-ion batteries used in the current generation of electric vehicles.
