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Ministers urge the EU to abandon plans to build electric cars in the UK, putting thousands of jobs at risk as major automakers warn of the implementation of post-Brexit trade rules. are asked to delay
Business Minister Kemi Badenoch has already raised concerns with Brussels about the requirements under the Trade Cooperation Agreement (TCA) negotiated by Boris Johnson and the EU.
This follows Vauxhall parent company Sterantis telling parliamentarians that it will keep its promise to build electric vehicles (EVs) in the UK as the UK faces devastating export tariffs due to the implementation of EU-wide ‘rules of origin’. After saying that it is not possible. It will enter into force in January 2024.
The company is seeking changes to the TCA to delay the introduction of rules in the UK.
but I We understand that the EU has no intention of resuming the TCA, but the TCA specifies that the rules will start in January, and a March European Commission document only calls for “technical adaptations”. It is clear that they intend to do so.
This is likely an attempt by the UK to persuade the EU to delay rules that apply across the region, with the 10th spokesman saying that these rules are “not just for manufacturers here in the UK, but across Europe.” problem,” he claims.
However, European countries are likely to argue that they have access to the entire EU single market and that tariffs apply only to exports to the UK, making them well-positioned to absorb the impact.
Badenoch is scheduled to meet with Stellantis executives at a prearranged meeting on Wednesday.
Whitehall officials said she also raised the auto industry’s concerns about the TCA with Prime Minister Jeremy Hunt and Foreign Secretary James Cleverley, who will lead post-Brexit relations with the EU.
Hunt suggested on Wednesday that he would announce a move to boost UK production capacity for EV batteries, a central issue sparking concern in the auto industry.
“All I’m saying is I want you to pay attention to this area. We’re very focused on making sure the UK gets EV manufacturing capacity,” he said at a meeting of the British Chamber of Commerce. It’s because there is,” he said.
Stellantis is the world’s fourth largest automaker, owning Vauxhall, Citroen, Peugeot and Fiat, and employs over 5,000 people in the UK.
The company committed two years ago to building electric cars at its Ellesmere Port and Luton factories.
However, the company said in a filing with the Commons Business and Trade Commission that the Brexit deal “is a threat to our export operations and the sustainability of UK manufacturing”.
He urged the government to reach a deal with the EU to keep existing rules in place until 2027, rather than introduce changes scheduled for next year.
Under the TCA, 45% of the value of electric vehicles will have to be produced in the UK or the EU from next year and can be traded tariff-free, but with higher battery requirements.
Failure to comply will result in a 10% tariff on cars made in the UK, making domestic production and exports unable to compete with cars made within the EU or in countries such as Japan and South Korea.
Stellantis said that rising raw material prices due to the pandemic and energy crisis “made it impossible to meet these rules of origin.”
The company said the 10% tariff meant manufacturers “couldn’t continue their investment” and had to relocate.
“The UK needs to consider a trade deal with Europe to strengthen the sustainability of its manufacturing plants,” Stellantis told the survey, citing Honda’s Swindon plant closure as an example of the impact. and investment in the United States.
Stellantis said there would be “insufficient battery production” in the UK or Europe to meet government targets to phase out petrol and diesel cars by 2025 and 2030.
“If we can’t rely on UK and European batteries in sufficient quantities, we will be at a huge competitive disadvantage, especially against imports from Asia,” he said.
“By establishing battery production in the UK, we need to make the UK more competitive.”
Birmingham Business School professor David Bailey warned Wednesday that “I think there is some sort of existential threat to the UK car industry.”
he told BBC Radio 4. today Programme: “Automakers have been arguing for some time that tightening regulations could make them unable to comply with these rules and face tariffs.”
Labor leader Sir Keir Sturmer said he needed a “better Brexit deal” to allow companies such as Vauxhall to continue to operate in the UK, but officials said this was due to the TCA’s He insisted there would be no major renegotiation.
The Society of Motor Manufacturers (SMMT) said the rule poses a threat to businesses in both the UK and the EU.
Mike Hawes, CEO of SMMT, said: “Battery rules of origin will prevent consumers from buying the very cars needed to achieve climate change, with tariffs and the prospect of higher prices. So the rules of origin for batteries pose a significant challenge for manufacturers on both sides of the strait.” the goal.
“As countries accelerate their transition to zero-emission transport and global competitors provide billions of dollars to attract investment in their industries, we are looking for a practical solution. We must find it quickly.”
This story has been updated.
