Electric vehicle manufacturers are confronted with a £3.7bn expense due to EU tariffs.

Unless the EU reconsiders the initiation of tariffs on trade between the bloc and the UK, electric vehicle makers are confronting a £3.7bn bill over the ensuing three years, as stated by industry leaders.

The European Automobile Manufacturers’ Association (ACEA) indicates that unless the impending “rules of origin” regulations are dismissed, factories might cut production by around 480,000 vehicles during this period.

Set to be enacted in January, these rules were formulated to compel car companies to manufacture vehicles utilizing parts obtained from within the UK or the EU, otherwise facing a 10% tariff.

Nonetheless, manufacturers are dependent on components from markets such as China, and the ACEA has cautioned that adhering to the EU regulations will be “virtually unattainable.”

Luca de Meo, ACEA president and CEO of Renault Group, remarked, “Elevating consumer prices of European electric vehicles, precisely when we need to vie for market share amidst rigorous international competition, is an incorrect approach—both business-wise and environmentally.”

He added, “This essentially means ceding a segment of the market to international manufacturers. Europe should be aiding its industry in the transition to net-zero, similar to other regions, rather than obstructing it.”

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