“Brexit and Battery Production: The Challenges Faced by UK’s Electric Car Industry in Exporting to the EU”

The European Union has determined that from next year 45 percent of the value of an electric car must be of British or European origin in order to be exported to the mainland without tariffs. In 2027, this percentage will rise to 65 percent. If that is not the case, a rate of 10 percent will apply. This can cause problems for the British because not enough batteries are made in their own country and are therefore imported, usually from outside the European Union. Batteries are the most expensive part of an electric car.

Dates

Stellantis hopes that London and Brussels can agree to postpone next year’s planned increase. After all, a lot has changed since the Brexit deal was concluded, such as high inflation as a result of the war in Ukraine and the corona lockdowns. British Economics Secretary Kemi Badenoch has promised to do her best. According to the minister, a postponement would be beneficial for both parties, the UK and the EU. Stellantis invested heavily in electric cars in the UK two years ago.

Meanwhile, Stellantis said the UK government needs to speed up battery production. “If the cost of making electric cars in the UK becomes unprofitable, factories will close,” the group said, “manufacturers will no longer invest and relocate, as we have seen with Ford and Mini.” Only 775,014 cars will be made on British soil by 2022, the lowest number since 1956, data from the Society of Motor Manufacturers and Traders showed earlier this year. Brexit and corona lockdowns are seen as the main causes.

Britishvolt

British battery production was hit early this year when Britishvolt went bankrupt, ending a dream for a giant battery factory in the north east of the country. A battery factory of Envision AESC is now being built in the same region, near the Nissan factory. Compared to other countries, the British government appears to be less active in supporting this industry. Recently, Tesla owner Elon Musk was a guest of French President Emmanuel Macron. Musk may set up a large battery factory in France.

Meanwhile, the Spanish government is trying to persuade Jaguar Land Rover, the largest British automaker, to set up such a factory on Spanish soil.