British EV Makers Face Tariff Hit Amid EU Trade Rules

British electric vehicle manufacturers could incur £1.4 billion in tariffs due to EU rules on local content requirements. The rules, set for January 2023, would impose a 10% tariff on 70% of battery electric and plug-in hybrid models. The car lobby warns of competitiveness and affordability issues.

British electric vehicle manufacturers are bracing for a potential financial impact, estimated at £1.4 billion, due to impending European Union tariffs. These tariffs stem from local content requirements, also known as rules of origin, which could significantly affect the automotive sector starting January 2023.

The Society of Motor Manufacturers and Traders (SMMT) has warned that these regulations will impose a 10% tariff on a substantial portion—70%—of battery electric and plug-in hybrid models traded with the EU. Such a move could render many of these vehicles less competitive and less affordable for consumers.

Given that Britain and the EU are each other's largest markets for EV exports, there are concerns about the broader economic implications of these trade barriers. A previous postponement of these rules occurred after threats by carmakers to shutter UK plants.