BERLIN, (Reuters) – Germany’s powerful auto industry association is urging the European Union and Britain to postpone post-Brexit rules it says would hamper the transition to electric vehicles, potentially boosting the hand of UK-based carmakers calling for the same.
Under the trade deal agreed when Britain left the EU, 45% of the value of an electric vehicle (EV) sold in the EU must come from Britain or the EU from 2024 to avoid tariffs.
The problem is that a battery pack can account for up to half a new EV’s cost and Europe has not yet developed a big enough battery industry of its own – and is unlikely to do so by the end of 2023, the VDA association said in a statement.
Tariffs both on exports to Britain and imports from it would be “a significant competitive disadvantage for the European car industry in relation to its Asian competitors in the so important UK market”, it said.
They would also represented a “danger for the development of e-mobility” as they would hurt the whole EU supply chain including battery makers, causing Europe to fall further behind as a production site.
“This would put the brakes on the transformation,” the lobby group said.
Earlier this week, carmaker Stellantis warned British car plants would close with the loss of thousands of jobs if the issue was not addressed.
Britain said on Wednesday it was in talks with Brussels.
“We hope to be able to come to a resolution with the EU on this,” Prime Minister Rishi Sunak’s spokesperson told reporters on Wednesday.
Photo courtesy of Merceds-Benz