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Warning that new EV prices could soar
next year unless trade rules relaxed
Electric vehicle (EV) buyers face a £3,400
price hike from the start of next year unless
post-Brexit trade rules are delayed, an
automotive industry body has said.
The Society of Motor Manufacturers and
Traders (SMMT) has called on the UK and EU
to postpone the implementation of tougher
rules of origin requirements on EV batteries.
Tariffs of 10% are due to be imposed on
exports of electric cars between the UK and
EU from January 1 if at least 45% of their
value does not originate in the UK or EU.
Manufacturers will struggle to meet that
threshold as battery production within
Europe has not increased as quickly as
hoped.
The SMMT estimated the tariffs could
result in an average price rise of £3,400 on
EU-manufactured pure battery electric
vehicles bought in the UK.
Nearly half (49%) of all pure battery
electric vehicles bought by UK buyers are
from the EU.
The SMMT said conventional petrol and
diesel vehicles would escape tariffs, which
would “have the perverse effect of
incentivising the purchase of fossil fuelpowered
vehicles”.
It described a three-year delay in
implementing the new rules of origin
requirements as “a pragmatic solution” as it
would allow time for European battery
production to ramp up.
SMMT’s chief executive Mike Hawes said:
“UK automotive is a trading powerhouse
delivering billions to the British economy,
exporting vehicles and parts around the
world, creating high value jobs and driving
growth nationwide.
“Our manufacturers have shown incredible
resilience amid multiple challenges in recent
years, but unnecessary, unworkable and
ill-timed rules of origin will only serve to set
back the recovery and disincentivise the very
vehicles we want to sell.
“Not only would consumers be out of
pocket, but the industrial competitiveness of
the UK and continental industries would be
undermined.
“A three-year delay is a simple, commonsense
solution which must be agreed
urgently.”
A Government spokesperson said: “We
need a joint UK-EU solution to avoid
consumers facing tariffs on electric vehicles
from 2024 which do not apply to petrol and
diesel cars.
“We have raised this with the European
Commission and are ready to work with them
to find a solution within the existing structure
of the Trade and Cooperation Agreement. The
UK remains one of the best locations in the
world for automotive manufacturing.”
Sunak blamed as private EV sales hit a slowdown
The boss of car dealership Vertu Motors has
said the Government’s “confusing messaging”
on net zero targets is partly to blame for
cooling demand for electric vehicles.
Robert Forrester, chief executive of Vertu,
said retail demand has been “muted”
following Prime Minister Rishi Sunak’s move
to push back the ban on the sale of new
petrol and diesel cars in the UK from 2030 to
2035, as well as cost-of-living pressures.
Mr Forrester said the Government has
caused confusion by announcing soon after
delaying the ban that it will still impose
stretching targets for car manufacturers to
achieve specific zero emissions vehicle (ZEV)
sales targets.
More than a fifth (22%) of new cars sold by
manufacturers in the UK next year must be
zero emission, under the new rules, rising to
80% in 2030.
Mr Forrester said manufacturers are
resorting to discounts and offers to try to
boost flagging demand.
He said: “Increased supply of new electric
vehicles from manufacturers is evident while
retail demand remains muted.
“The Government’s confusing messaging
may further contribute to this.
Royal accolade for Euro safety project
The groundbreaking Road Safety Exchange
project, celebrated as a catalyst for lifesaving
initiatives across Europe, from
Norway to Greece, is to receive one of the
highest accolades in the road safety field –
the prestigious Prince Michael International
Road Safety Award, presented by His Royal
Highness Prince Michael of Kent.
This recognition underscores the project’s
impact on enhancing road safety.
Congratulating the project partners, HRH
Prince Michael of Kent said: “In 2012 I was
very pleased that the ETSC was among the
award winners for their Road Safety
“Manufacturers are therefore seeking to
stimulate retail demand for these vehicles
through the offer of discounted prices and
supported finance rates.
“These market dynamics combined with
the ZEV mandate have the potential to
disrupt the recovery of the new car market in
the next few years.”
Recent industry figures from the SMMT
showed retail sales of battery EVs fell 8.5%.
But fleet sales are up 64.8% in the year to
August, thanks to companies incentivising
staff to buy them through salary sacrifice
schemes.
Performance Index at that year’s ceremony.
“That is why I am very pleased to present a
second award to the ETSC this year,
alongside the European Commission and
Parliament, for their innovative EU Road
Safety Exchange.” Road Safety Exchange will
receive the award next month, in London.
12 NEWSLINK n NOVEMBER 2023