EU/UK rules of origin for electric cars POSTPONED for three years

New rules of origin for electric cars due to come in to effect on 1 January 2024 have been postponed until the end of 2026.

Flogging electric cars is no easy task for car makers – especially to private buyers – with high prices down to battery costs, probably 30 per cent plus of the cost of an EV.

So a proposal by the EU to invoke post-Brexit rules of origin on EVs built in the UK and Europe from 1 January 2024 requiring 45 per cent of materials to be ‘locally’ sourced would have meant the imposition of a 10 per cent duty on EVs.

But in a moment of unexpected sanity – and under pressure from car makers – the EU has had a change of heart and has postponed the rules until the end of 2026.

It was always impossible for car makers in Europe to comply with the new rules of origin for EVs with the majority of batteries coming from China, but extending the deadline will, it’s thought, give Europe time to develop sufficient battery production to comply.

Mike Hawes, SMMT Chief Executive, said:

Deferring the rules of origin is a win for motorists, the economy and the environment. Maintaining tariff-free trade in EVs will ensure consumers retain the widest and most affordable choice of models, at a time when we need all drivers to make the switch. Governments have listened to the sector and acted to safeguard the competitiveness of the EU and UK automotive industries and give the Anglo-European battery industry the critical time it needs to catch up. The measure will help cut carbon, support growth and jobs, and is the right decision for the decarbonisation of road transport.