Germany’s carmakers have lent their support to UK pressure on the EU to delay tariffs agreed as part of Boris Johnson’s Brexit deal.
The government of Rishi Sunak hopes that the European Commission will agree to postpone the costly new tariff rules, which will come into force in January 2024.
The UK car industry has already warned that post-Brexit, the ‘cliff edge’ looming early next year threatens the electric car industry.
And now the VDA – the lobby group for the German car industry – has said that “we urgently need to make adjustments” to the Brexit deal to protect both European and British companies.
The group warned that tariffs “would place the European car industry at a significant competitive disadvantage vis-à-vis its Asian competitors in the all-important UK market”.
The EU has been warned of an “existential threat” posed by new rules of origin that will force carmakers to build more batteries domestically.
Among the latest parts of the Brexit deal agreed by Mr Johnson, the changes require 45 per cent of an electric car’s value to come from the UK or the EU in order to qualify for tariff-free trading.
An EU official told the newspaper Financial times that Brussels was “not open to changes in rules of origin” and stressed that “stakeholders have been given time to adapt”.
But automakers across the continent have been pushing for a delay because Europe’s battery industry hadn’t developed fast enough to keep pace with the new rules of origin.
The European Association of Car Manufacturers (ACEA) is calling on Brussels to “extend the phase-in period” because the battery supply chain in Europe is “simply not getting off the ground fast enough”.
The UK’s Society of Motor Manufacturers and Traders (SMMT) has called for a delay to 2027. Mr Sunak has previously ordered talks with Brussels after Vauxhall’s parent company Stellantis warned it will not be able to continue production in Britain without changes to the trade agreement.
It comes as Britain struggles to boost its battery production. The manufacturer Britishvolt went bankrupt earlier this year, while Jaguar owner Tata Motors continues to press the government for subsidies to build a new battery factory in Britain.
Chancellor Jeremy Hunt sparked hope on Wednesday when he said “watch this space”. Asked about a battery manufacturing deal with Tata, he said: “Everyone is trying to develop the EV battery offering, so we need to have that offering here in Britain.”
It comes as Mr Sunak managed to clean up some of the post-Brexit mess by striking a deal with Brussels that would see Britain rejoin the EU’s £85 Horizon science research programme. billion worth.
After months of uncertainty, the government said on Wednesday that a “tailor-made” new agreement has been signed allowing UK researchers to apply for grants and participate in Horizon projects.
This move comes as a huge relief to scientists amid warnings that British researchers have missed collaboration with colleagues in Europe for much of the two years since Brexit.