EU Reportedly Plans to Delay 10% Tariff on UK Electric Vehicles

The European Union plans to delay a 10% tariff on electric vehicles from the United Kingdom, which was scheduled to take effect on January 1 for most vehicles. According to Sina Finance, the EU is seeking industry feedback on a proposal to postpone the tariff. Under the post-Brexit agreement, electric vehicles must have at least 55% of their value sourced from the EU or UK to qualify for zero tariffs; battery cells and modules must account for at least 65% of their value, and battery packs at least 70%. Vehicles that fail to meet these requirements face a 10% import tariff. The EU proposed in late 2023 to delay implementation of the stricter rules by three years. Under the rules, which were originally due to take effect in January 2027, 70% of battery-electric and plug-in hybrid vehicles traded with the EU would face a 10% tariff following the latest delay. In June, the Society of Motor Manufacturers and Traders (SMMT), the UK's main automotive industry lobby group, warned that electric vehicle manufacturers would have to pay £1.4 billion (about $1.86 billion) in tariffs if the local-content requirements, also known as rules of origin, were not resolved. The UK and the EU are each other's largest export markets for electric vehicles, and both have set targets to phase out combustion-engine vehicles during the 2030s.