The EU has put forward a proposal to extend by three years the implementation of stricter regulations that would otherwise result in import tariffs on numerous electric vehicles (EVs) traded with Britain starting next year.
Both Britain and the European Union are major export markets for each other’s EVs, which are promoted as a greener alternative to vehicles with internal combustion engines running on petrol or diesel.
Additionally, the European Commission plans to allocate an extra €3 billion (£2.6 billion) to enhance the EU’s battery production sector. This strategy aims to increase domestic production and decrease dependence on China.
Under the post-Brexit Trade and Cooperation Agreement (TCA), EVs must have at least 55% of their value originating from the EU or Britain to be exempt from tariffs, with the requirement being 65% for battery cells and modules, and 70% for battery packs.
The TCA includes two transitional phases: initially, EVs need 40% local content, with battery packs and components at 30%, followed by a period from 2024-2026 requiring 45% for EVs, 50% for battery cells and modules, and 60% for battery packs.
EVs not meeting these criteria face a 10% import tariff.
The Commission suggests extending the initial transitional phase to 2027, after which the full local content requirements of the TCA will be enforced.
