Europe and UK agree to delay ‘rules of origin’ electric car tariffs

A three-year postponement allows the European auto industry time to challenge China’s dominance of the EV battery market

The European Commission appears to have heeded car industry pleas on both sides of the channel, and calls from the UK Government. It will announce a proposal to step back from the imposition of tariffs on imported electric car batteries that could have increased prices for EVs both here and in the European Union.

Reports suggest that a proposal to delay the new trading arrangement on so-called Rules of Origin will be announced by the Commission vice president tomorrow. The measure will be voted on by 27 member states next week, in time for car makers to avoid punishing tariffs for imported car batteries or battery materials that could have pushed prices up by 10 per cent for consumers from January next year. Had an agreement not been reached, tariffs would have been imposed as a result of local content rules for EV batteries that the car industry can’t yet meet being enforced from January 2024.

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The EC is also likely to announce a package of financial support for the European battery industry, in an effort to head-off Chinese competition – a concern has previously been expressed by Eurocrats that postponing the tariffs originally scheduled for 2024 would simply increase dependence on Chinese battery imports.

The news from the EC will be welcomed by the car industry in the UK and Europe, which is struggling to entice buyers for EVs in the anticipated numbers. Europe’s car makers, including those in the UK, are keen to use locally-sourced batteries, but say it has taken longer than expected to get production facilities up and running.

China currently accounts for 70 per cent of the lithium-ion batteries used in the present generation of EVs, having essentially cornered the market.

Can Europe fight back against China in the EV battery market? Let us know your thoughts in the comments…

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