Proactive Investors - Post-Brexit trade rules requiring carmakers to pay tariffs on shipments between the UK and European Union could cost the industry billions, manufacturers have warned.
Urging the rules be postponed, The European Automobile Manufacturers Association (ACEA) claimed the 10% tariffs on cars not mainly built with EU or UK-sourced parts would cost £3.75bn over the next three years.
“Driving up consumer prices of European electric vehicles, at the very time when we need to fight for market share in the face of fierce international competition, is not the right move.
“We will effectively be handing a chunk of the market to global manufacturers,” acting ACEA president Luca de Meo said.
Under the rules, which come into force in January, 45% of parts used in electric vehicles will have to be sourced in Europe or the UK, with this stretching to up to 60% for their batteries.
Manufacturers will face a tax of 10% on cars shipped across the English Channel that do not meet the requirement.
The ACEA warned manufacturers were not ready though, suggesting the move could simply see companies up and leave with the loss of jobs and up to 480,000 cars from production.
Meeting the requirements is “practically impossible to achieve today,” the group added, urging more time be granted for domestic supply lines to be developed.