EV prices could soar by more than £3,000 in just weeks – as carmakers face deadline
EV PRICES could be set to soar by more than £3,000 in just weeks as manufacturers face a deadline.
Companies that make electric cars could face far higher import bills amid a trade row with Europe.
Industry bosses are calling on the EU to extend the implementation of tariffs on UK-made motors, set to come into force in the new year.
The bloc's rules state that 55% of the value of a vehicle must be made up of parts sourced from within the EU, with a 10% tariff on cars not meeting this threshold.
Under the Brexit agreement, which became active in May 2021, the UK was exempted from this until 2024.
However, Brussels is now resisting calls for the deadline to be extended after years of disruption to the auto industry sparked by the pandemic and Ukraine War.
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Analysis from the Society of Motor Manufacturers and Traders (SMMT), the body which represents car makers in the UK, this would amount to a £3,400 price increase per car for electric cars made in the EU with imported parts.
Likewise, models produced in this country could see an even higher uptick of £3,600.
EVs on the Continent would face a collective price spike of £4.3 billion.
Mike Hawes, chief executive of the SMMT, said: “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.
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"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, common-sense solution which must be agreed urgently."
His calls have been backed by the UK Government and the SMMT's equivalent body across the Channel, the European Automobile Manufacturers’ Association (ACEA).
Sigrid De Vries, ACEA's director general, added: "Massive investments are being made in European battery supply chains – including by European vehicle manufacturers – but it would take more time to build up the kind of scale needed to meet the rules of origin."
In response to the concerns of the industry Maros Sefcovic, the vice-president of the European Commission, indicated that Brussels could broaden the range of what counts as a European part, effectively loosening the regulations.
However, the SMMT said this would not go far enough and that a delay was necessary to allow its members to prepare for the new costs.
A spokesperson added: "The application of a 10 per cent tariff on electrified vehicles alone would undermine shared ambitions to be global leaders in zero-emission mobility, holding back markets and undermining the drive to deliver net zero, given road transport remains the biggest contributor to overall carbon emissions."