One of the world’s largest car manufacturing companies has called on the UK government to renegotiate its post-Brexit deal with the EU or risk losing out in the automotive sector.
Stellantis – the parent company of Vauxhall, Fiat, Peugeot and other well-known car brands – told a parliamentary inquiry that rules of origin contained in the EU-UK Trade and Cooperation Agreement (TCA) make it difficult for UK manufacturers to source parts from abroad while retaining tariff-free trade.
Under the rules of origin, at least 40% of the value of any electric car should originate from the EU or UK in order to avoid a requirement to pay import duties, although this number will increase to 45% from 1 January 2024.
From 1 January 2027 onwards, this is set to increase to 55%, with an additional requirement that the battery must be originating for hybrid vehicles.
Currently up to 70% of electric vehicle battery components can come from outside the UK or EU before tariffs apply, but this is also set to drop to 40% from 1 January 2024 onwards, with further changes planned.
Stating it had concerns on the impacts of rules of origin requirements for the supply of batteries and other items, Stellantis called the deal, as it currently stands, a threat to its export business and manufacturing.
It also warned that stricter rules of origin could create significant challenges to the bilateral trade of electric vehicles and batteries.
It called on the government to seek an improved deal with the EU in order to overcome these problems