Brexit renegotiation urged by UK car manufacturers

The EU and UK governments are facing pressure from three major UK car producers as the deadline for tariff-free trade based on the origin of components used to build a product looms closer.

Since the UK left the European Union in January 2021 in a process called Brexit, to qualify for tariff-free trade of goods between EU and the UK, companies have been required to produce goods that comprise of at least 40% of components produced and sourced in the UK or EU.

The amount of components required is due to be extended from 40% to 45% in January 2024, thus putting the viability of electric car manufacturing at risk in the UK.

Manufacturers in the UK and the EU face problems with the legislation as many batteries used in the manufacture of electric vehicles are sourced from Asia, however the problem is more acute in the UK as there is no producer of batteries based in the UK, large enough to supply the car industry needs.

Without a change in the legislation cars built in the UK and destined for the EU market will be come subject to a 10% tariff thus making cars built in the UK uncompetitive in the EU market.

The UK manufacturers, Ford, Jaguar Land Rover and Stellantis (Vauxhall) are requesting the EU and UK get back round the table to extend the deadline to 2027.

If you are looking for advice on trading in the UK or the EU why not contact our compliance experts here at Product Compliance Support.

If you are looking for authorised representative services so that you can trade your goods in the UK or the EU then please get in contact with one of our team today and we will be happy to guide you through the process.