The European Union is set to delay a 10% tariff on electric cars from the United Kingdom, the Financial Times reported on Thursday, citing people familiar with the matter. Reuters said it could not immediately verify the report.
Brussels is consulting the industry on proposals to postpone the 10% levy that would apply to most electric vehicles from January 1, the FT reported, in a move that would give carmakers on both sides of the Channel a multi-billion euro reprieve.
The post-Brexit agreement between the EU and the UK says that to qualify for zero tariffs, at least 55% of the value of an electric vehicle needs to come from the European Union or Britain, with values of 65% for battery cells and modules and 70% for battery packs. Many electric vehicles fall short of those requirements, but the EU in late 2023 proposed a three-year delay to the tightened rules. After that delay, the post-Brexit rules triggering a 10% tariff on 70% of battery electric and plug-in hybrid models traded with the EU were due to take effect from January 2027.
The European Commission and the British Department for Business, Innovation, Science and Trade did not immediately respond to Reuters requests for comments sent outside of regular business hours.
The possible delay comes as global demand for electrified cars returned to growth in October, according to data from UK-based research firm Benchmark Mineral Intelligence. Global sales of new battery-electric and plug-in hybrid vehicles climbed 8% from a year ago to 2.09 million units in October, while European sales grew 36%, helped by subsidies, rising fuel prices, EU emissions legislation and a rising number of models.
