In a letter to European Commission President Ursula von der Leyen, automotive industry leaders have joined forces to call for immediate action to prevent unnecessary tariffs being imposed on vital electric vehicle trade between the EU and the UK.
With around two months to go until the current rules of origin (ROO) in the EU-UK trade and cooperation agreement (TCA) expire, European automotive leaders have stepped up their joint call for a three-year extension to existing rules.
The much-needed extension will act as a bridging mechanism, allowing for sufficient time to develop a battery industry in the EU and a strong EV production base to compete internationally.
The UK is one of the top destinations for EU electric vehicle exports, with more than one in 10 EU car exports to the UK in 2022 being battery-electric.
European auto makers warn that failure to act could cost EU vehicle makers €4.3 billion over the next three years, potentially reducing electric vehicle production by some 480,000 units, equivalent to the output of two average-size auto factories.
German car group Volkswagen has no plans for a fourth battery factory site at present, Chairman Oliver Blume said today after talks with Czech government officials this week, Reuters has reported in media.
“Based on market conditions, including the sluggish ramp up of the BEV market in Europe… there is for the time being no business rationale for deciding on further sites,” he said.
Higher costs by manufacturers would have to be passed onto consumers, which means EV sales would dramatically slow at a time when investment is needed in the new battery packs if the UK and EU is to reach their zero emissions targets from 2035.