Exports of electric cars from the UK to the European Union will be subject to a 10 percent levy from January 1, unless the position of EU countries changes in the meantime.
UK manufacturers had proposed that electric and hybrid cars be exempt from rules requiring that at least 55 percent of the components in each car originate either in the UK or in Europe. EU manufacturers were in agreement, but the decision rests with the 27 member countries of the EU.
The UK proposal was that 70 percent of parts from outside the two zones would still qualify for the levy-free treatment. This would have allowed Japanese parts in particular to provide the majority of components, including batteries.
However, the European Union is determined to become more self-sufficient in all aspects of electric and hybrid vehicle manufacture.
Prof David Bailey, automotive specialist at the Birmingham Business School and UK in a Changing Europe, told the BBC: “This will catch out some UK based car assemblers, particularly as the industry electrifies.
“The car industry is going through fundamental change, the EU see a threat from China, Korea and Japan, and is trying to build an electric vehicle supply chain in Europe.”