The European Union’s refusal to change anything on Brexit trading rules could cost car manufacturers £3.75billion.
The new rules, which are meant to make sure all cars sourced from the EU are built using locally sourced parts, form part of the UK-EU Trade and Cooperation Agreement.
However, car manufacturers in both the UK and EU say they are not ready for the new rules to come into place.
As a result, the European Automobile Manufacturers Association (ACEA) have warned customers will pay the price as they will have to pay more for a brand-new European electric car.
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The problems concern the “rules of origin” which apply to all cars going across the Channel from January onwards.
The new rules mean that some electric cars will need to have batteries that are either produced in the EU or the UK.
Cars which don’t meet these new rules will face 10 percent tariffs when taken from the EU to the UK or vice versa. The rules were brought into force to protect the EU from cheaply imported cars.
However, in light of a massive spike in demand for brand-new electric cars, European and British manufacturers are struggling to keep up with demand.
The high tariffs that would be imposed on electric cars travelling across the Channel could make them more expensive to build and therefore increase their prices.
To try and prevent this, the ACEA wants to the new rules to be delayed by three years to 2028.
In a statement, Renault chief executive and acting ACEA president Luca de Meo said: “Driving up consumer prices of European electric vehicles, at the very time when we need to fight for market share in the face of fierce international competition, is not the right move.
“We will effectively be handing a chunk of the market to global manufacturers.”
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In order for the changes to be made, an agreement will need to be reached between the UK and the EU.
While Business Secretary Kemi Badenoch said she was “optimistic” an agreement could be reached, the EU’s internal market commissioner was less positive.
Speaking to the Guardian, Thierry Breton said he thought it would be wrong to re-open the Brexit deal. He explained: “If something has been negotiated, it shouldn’t be changed.”
In a statement, the European Commission said the original purpose of the new rules had been to create a “strong and resilient battery value chain in the EU”.
In response to the European Commission’s statement, the secretary general of the ACEA, Sigrid de Vries, was critical of their decision.
She told the BBC: “The European Commission doesn’t want to change anything, it seems when it comes to Brexit-related topics. It’s politically very sensitive. We do understand it, and we are not asking to change any of these arrangements in any fundamental way.”
Reclaim MP Andrew Bridgen told the Express the EU was simply being stubborn. He said: “Anything can be renegotiated if there is the will to do so.
“Our Brexit agreement should not be set in stone but modified to accommodate new technologies and new products. It appears that some in the EU want to play hardball to punish the UK for leaving even if this damages the EU in the process”
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