On the 15th December 2023 there was welcome news for manufacturers of electric vehicles in UK when the EU announced an extension to the rule of origin deadline. The deadline, 31st December 2023, would have required 45% of components used in electric vehicles be manufactured in the country of origin to avoid electric vehicles being imposed with a 10% import tariff. This tariff would have seen an average increase of £3,400 on the sale price of UK vehicles being sold in the EU and made UK vehicles uncompetitive..
The increase in energy price as a result of Russia’s invasion of Ukraine has is seen as a contributing factor for the delay, but Marcoš Šefčovič, the commissioner for interinstitutional relations in the EU said it was on “one off” and it will not change again. Originally the 45% increase was due to last for three years when it would rise again to 55% on the 1st January 2026.
The extension gives more time for the UK to establish a credible battery manufacturer, where currently there is none. At the same time the EU has made available €3 billion in financial support for manufacturers in the European Union who are producing batteries the most sustainably.
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