Car trade - EU Commission: further suspension of Brexit tariffs for e-cars
Good news for the German automotive industry: electric cars are to be exempt from Brexit tariffs in trade between the EU and the UK for a further three years. The EU Commission made a proposal to this effect in Brussels. The ball is now in the court of the EU member states, which must approve the proposal by a qualified majority. This requires the approval of at least 15 of the 27 EU states. These must also represent at least 65% of the EU population.
Due to the UK's withdrawal from the EU, new customs rules were actually due to come into force on January 1, 2024. Vehicles with less than 45% of their value added in the EU or the UK would then be subject to a 10% duty. This would affect manufacturers who do not achieve the value-added quota for e-cars, for example due to a lack of battery production capacity.
According to the EU Commission, aspects such as the Russian war of aggression against Ukraine or the coronavirus pandemic could not have been foreseen when the introduction of tariffs was negotiated in 2020. The European battery industry has also developed more slowly than expected due to the pandemic and the war of aggression. However, the Commission proposal also states that there should be no possibility of suspending the tariffs beyond December 31, 2026.
Automobile association satisfied
British car manufacturers feared that they would no longer be competitive in the important EU export market due to the tariffs from next year. German car manufacturers would also be affected by tariffs on exports to the UK in future if they are not suspended. The German Association of the Automotive Industry (VDA) has already described the duties as a significant disadvantage for European companies compared to their Asian competitors in the important UK market.
Association President Hildegard Müller reacted positively to the EU Commission's announcement: "This decision is the right one and a win for the climate, industry and consumers." The proposal must now be implemented by the EU member states and the UK as quickly as possible.
Both British car manufacturers and the German automotive industry will benefit from the extension of the rules of origin, as Marc Lehnfeld from the federally owned company Germany Trade and Invest (GTAI) emphasized. In German-British trade, the so-called car factor - i.e. foreign trade in cars, parts and engines - is the most important group of goods at around 22 percent in the current year. "The British automotive industry can now regain confidence," said Lehnfeld. "The German automotive industry can also benefit from the shift." Germany is the UK's most important supplier country for fully electric vehicles and hybrids.
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- Despite the UK's departure from the EU, electric cars will continue to be exempt from tariffs in trade between the EU and Great Britain for an additional three years, as proposed by the EU Commission in Brussels.
- Without this exemption, vehicles with less than 45% of their value added in the EU or the UK would be subject to a 10% duty beginning January 1, 2024, affecting manufacturers who fail to meet the value-added quota for electric cars due to battery production capacity limitations.
- The EU Commission cites unprecedented events such as the Russian war of aggression against Ukraine and the coronavirus pandemic as reasons for reconsidering the tariffs, which were initially negotiated in 2020.
- The proposal aims to extend the exemption for electric cars beyond December 31, 2026, but indicates that there should be no possibility of further suspension.
- British car manufacturers had expressed concerns about their competitiveness in the EU export market due to the anticipated tariffs, while German automakers would also face tariffs on exports to the UK if not suspended.
- The German Association of the Automotive Industry (VDA) has described the duties as a significant disadvantage for European companies in the UK market compared to their Asian competitors.
- Association President Hildegard Müller praised the EU Commission's decision, stating that it's a win for the climate, industry, and consumers.
- According to Marc Lehnfeld from the federally owned company Germany Trade and Invest (GTAI), both the British automotive industry and the German automotive industry will benefit from the extension of the rules of origin, with German manufacturers being the UK's most significant supplier of fully electric vehicles and hybrids.
Source: www.stern.de
