Rishi Sunak urges EU to listen to European carmakers calling for post-Brexit deal on ‘rules of origin’ to be eased to protect trade
Rishi Sunak has urged the EU to heed calls from European carmakers for post-Brexit ‘rules of origin’ to be eased to protect trade.
The PM said this morning that he is in talks with Brussels about the situation, after Vauxhall’s parent company warned it might have to shift production out of the UK, putting thousands of jobs at risk.
But speaking in Japan, where he is attending the G7 summit, Mr Sunak stressed that it was a problem for European manufacturers as well.
He pointed out the industry body representing groups such as BMW, Mercedes and Ford have echoed warnings that EV supply chains are not ready for the tough terms to be implemented.
Under the Trade and Cooperation Agreement (TCA) with Brussels, from next year 45 per cent of an EV’s parts should originate in the UK or EU to qualify for tariff-free trade between the two.
Without meeting the requirements, cars made in the UK would face a 10 per cent tariff if sold in the EU – and vice versa – rendering them uncompetitive.
Stellantis, the world’s third biggest car maker by sales – whose brands include Citroen, Peugeot and Fiat – employs more than 5,000 workers in the UK where it builds Vauxhall cars and vans. Pictured, the plant at Ellesmere Port
Vauxhall’s parent company Stellantis voiced concern amid the spiralling cost of electric car batteries, which are mainly sourced from Asia and can be up to 50 per cent of a car’s value.
Manufacturers are calling for next year’s rule change to be bumped back to 2027.
Speaking to broadcasters on a visit to Tokyo today, the PM said: ‘It’s something that car manufacturers across Europe, not just in the UK, have raised as a concern.
‘And as a result of that we are engaged in a dialogue with the EU about how we might address those concerns when it comes to auto manufacturing more generally.’
On concerns about UK battery-making capacity, Mr Sunak said: ‘Nissan have invested a billion pounds in battery manufacturing capability in the North East.
‘I’ll be talking to the Nissan CEO and other Japanese business leaders later about investment into the UK.’
Stellantis, the world’s third biggest car maker by sales – whose brands include Citroen, Peugeot and Fiat – employs more than 5,000 workers in the UK where it builds Vauxhall cars and vans.
Two years ago it had committed to making electric vehicles at its Ellesmere Port and Luton plants.
Without such a commitment its UK operations would eventually end, as petrol and diesel vehicles are phased out, but its European output would continue.
Speaking in Japan, where he is attending the G7 summit, Rishi Sunak (pictured with wife Akshata) stressed that it was a problem for European manufacturers as well.
Ford also called for the extension to 2027. It said tariffs next year would risk slowing the transition to electric cars. ‘Tariffs will hit both UK and EU-based manufacturers, so it is vital that the UK and EU come to the table to agree a solution,’ the US car maker said.
The calls were joined by VDA, the German car industy lobby group, which pushed the European Commission to also commit to the delay.
And the European Automobile Manufacturers’ Association (ACEA) said in a statement: ‘There has been massive investment in European battery supply chains.
‘The capacity to meet these rules of origin will come, but just not in the next few years.
‘ACEA has requested that the current phase-in period for battery rules is extended by three years.’
The UK car industry has for months been warning about the damaging impact of the ‘rules of origin’. But Chancellor Jeremy Hunt yesterday offered hope when he said ‘watch this space’ about the prospect of a UK gigafactory.
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