From January 1, 2024, customs duties of 10% must apply to electric vehicles crossing the Channel. The British government and manufacturers are hoping for a postponement.
UK still hopes to escape 10% tax
Mike Hawes, Managing Director of the Society of Motor Manufacturers and Traders (SMMT), the British car lobby, says “ optimistic about reaching an agreement with the European Union “. He still hopes to be able to negotiate with the 27 Member States in order to postpone or even cancel the post-Brexit customs duties which should normally apply within a few months on electric vehicles. However, the countries of the European Union have agreed to introduce a 10% tax on electric vehicles which will enter the British market from January 1, 2024.
To be exempt from this tax, at least “ 45% of the value of electric vehicle parts comes from the European Union or the United Kingdom “. Today, that is far from being the case. Indeed, most batteries come from China, for example. Furthermore, according to several analysts, this regulation could benefit Chinese manufacturers. They won’t have to endure it. But Mike Hawes is not alarmed. He believes that the conclusion of an agreement could come at the last minute, “ like for Brexit, on Christmas Eve or something like that ».
Electric cars produced in China: towards a surge in customs duties?
In Europe, regulations are debated. It turns out that the United Kingdom represents an important market for automobile manufacturers on the Old Continent. Enough to push Berlin to fall behind London under pressure from German manufacturers. They are worried about the future of their exports to the British market. The position of the leading country in the automobile sector in Europe could even encourage the European Commission to postpone the entry into force of customs duties.
On another front, Ursula Von der Leyen, president of the Commission, opened an investigation into subsidies granted to Chinese electric vehicles. The implementation of a tax to protect European car manufacturers from “ artificially low price » Chinese models would be on the agenda. The European Union says it does not want a “ unfair competition » while China protests and calls Ursula Von der Leyen to “ccreate a fair and non-discriminatory market environment » and points “ blatant protectionist behavior ».
How attractive is the British automotive industry?
The United Kingdom is working to become an attractive territory for car manufacturers. The Jaguar Land Rover group owned by the Indian Tata, for example, plans to build a battery factory for electric vehicles on British soil. It could see the light of day in Somerset, in the west of England. The Indian giant hesitated for a long time between Spain and the United Kingdom, but ultimately it was the native land of Jaguar Land Rover that was chosen. This factory on British soil is a big victory for the government and the country’s automotive industry.
Another example with Imerys, a French group specializing in minerals and industrial metals which recently announced its intention to become the “ leading integrated producer of battery lithium carbonate in the UK “. Alongside British Lithium, the group plans to exploit the country’s largest lithium deposit, in Cornwall. For Kemi Badenoch, Secretary of State at the Department of Commerce, “ this partnership between Imerys and British Lithium will strengthen our national supply of minerals, a crucial step for the development of our industry ».
Finally, Stellantis has just formalized the opening of its first factory dedicated 100% to electric vehicles in England. In Ellesmere Port, the automobile group will manufacture electric utility vehicles for its various brands. Kemi Badenoch, always, thinks that “ this establishment is demonstration that the British government has found the right formula to welcome large groups in the automobile industry “. The United Kingdom is doing everything to maintain a healthy automotive industry. So far this seems to be working.
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