This article was further amended because an earlier version referred to EU exports of electric cars to the UK worth €30bn a year being put at risk that figure relates to all vehicles (including trucks, cars, petrol and electric). An earlier version incorrectly described Stellantis as a “UK car giant” though it has operations in the UK, the company is headquartered in the Netherlands. This article was amended on 18 and 19 June 2023. “As we have seen before if there is political will things can be changed,” they said. One diplomat said the European commission was “just one voice” in this and its job was to be “inflexible” and “protect agreements”. This was echoed by Stefan Fuehring, one of the most senior EU officials in the trade negotiations, who warned amending the trade deal even in 2025 was “a long shot”, pointing out the review clauses concerned “implementation” of the deal and nothing more.Ī spokesperson for the EU said it had “taken note” of ACEA’s estimates. The continued battle to tweak the trade deal in relation to the auto sector comes days after Šefčovič dashed hopes that the trade deal would be reviewed before 2026. He said the Mediterranean agreement did not get round the fact that China was the dominant supplier of refined chemicals. It might be a long term solution but it is not the solution for the next three years,” said O’Riordan. We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply.Įarlier this month, the European commission vice president, Maroš Šefčovič, said the UK could join the pan-European Mediterranean agreement, which allows parts made in one country but assembled in another to be treated as one export source. For more information see our Privacy Policy. Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. Give us a bridging mechanism for the next three years,” said O’Riordan. We’re just saying we are not in a position to go too restrictive right now. “We are not saying the rules should not be restrictive. If we are talking a heavy duty truck it is between 45% and 50%,” said O’Riordan.ĪCEA formally wrote to the commission mapping out the costs, arguing it needed another three years for Europe to scale up not only battery supply but chemical refinement, which is critical to the process.Īt the moment, the trade deal merely requires that the battery cell be assembled in Europe but from next year the parts including the cathode material must also originate in Europe, including the UK, which ACEA says is impossible. With passenger cars, between 35% and 45% of the cost is … the battery. “The problem is the battery is such a high-value component of an electric vehicle. O’Riordan said China was the global supplier of “refined” active materials in batteries including nickel and manganese and cobalt oxide. Last month, the multinational car giant Stellantis, which is responsible for 14 brands including Vauxhall and Jeep, warned it might have to close operations in Britain with the loss of thousands of jobs if the new rule of origin came into force in January.Ī central issue is a lack of understanding of how much of an electric car’s cost emanates from the refinement and processing of chemicals in batteries, a process dominated by China, says ACEA. The EU introduced the rule of origin to help boost the fledgling electric car trade.Ĭhina still dominates the supply of chemicals, which consist of up to 45% of the cost of an electric vehicle, say ACEA. It would mean electric vehicles imported from the EU, already considered prohibitively expensive by many, would cost even more next year. A tariff of 10% would add costs of up to €4.3bn passed on to the consumer, absorbed by the industry or a mixture of both over the three years between 20, ACEA said. “We would expect total sales to be around €25bn to €30bn by 2026,” said Jonathan O’Riordan, ACEA’s international trade director. ACEA represents 75% of the auto industry in the EU. Exports of ACEA members’ electric vehicles to the UK were valued at about €4.3bn in 2022 but with a recovery in supply chain and the move away from combustion engines, the market is projected to boom.
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