Proactive Investors - Starting from January, new tariffs could raise the average price of electric vehicles made in Europe by £3,400, a key industry body has warned.
Tougher rules of origin set out in the Brexit agreement will mean manufacturers face extra taxes on exports from January if a proportion of their parts are not sourced from within Europe.
This could add £3,400 on average to the price of European electric vehicles being sold in the UK, industry body The Society of Motor Manufacturers and Traders (SMMT) said on Wednesday.
For British-made cars being sold in Europe, this will equate to £3,600 extra, the trade body added.
“New calculations lay bare the impact the new rules, set under the EU-UK Brexit deal, would have on vehicle affordability and competitiveness,” the group said.
Under the rules, 45% of parts used in electric vehicles will have to be sourced in Europe or the UK, with this stretching to up to 60% for their batteries.
Manufacturers will face a 10% tax on cross-Channel trade if this is not met, resulting in a combined extra cost of £4.3 billion for the industry, SMMT predicted.
Calls for the rules to be delayed have grown in recent months, especially given the lack of existing domestic battery production in both Britain and Europe.
“A three-year delay to the introduction of the stricter rules of origin is a pragmatic solution,” SMMT said.
“It would provide the necessary time for EU and UK gigafactories to come on stream as well as helping the development of local battery parts and critical mineral supply chains.”