New Post-Brexit regulations mandating that European automakers secure more components for electric vehicles (EVs) from within the UK or EU may impose an enormous tariff of up to €4.3 billion (RM21.7 billion), threatening to disrupt production. This startling revelation was made today by a top industry association.
As per the trade agreement established post-Brexit between the EU and UK, beginning from 2024, EVs will be required to contain a minimum of 45 per cent EU or UK content, with 50-60 per cent of battery cells and packs to be sourced locally. Non-adherence will trigger a 10 per cent import tariff from either the British or EU side.
The European Automobile Manufacturers’ Association (ACEA) has voiced strong opposition to this rule, advocating for a three-year delay to allow Europe to enhance its battery manufacturing capacity. Currently, Europe’s automakers heavily depend on battery cells and materials imported from Asia.
The ACEA projects that the tariff under these new rules could cost European manufacturers as much as €4.3 billion over three years, payable to the UK government. Given that the UK represents nearly a quarter of all EU EV exports, the consequence could be a severe reduction in EU production—potentially as much as 480,000 units.
Moreover, with only an estimated 10 per cent of EVs expected to meet the new requirements in 2024, EU producers may face significant competition from China and other nations. The ACEA has expressed these concerns to the European Commission and has requested a three-year delay in implementing the new rules.
This news is based on an article from malaymail.com.
