EU and UK Set to Delay 10% Tariff on Bilateral EV Trade Past January 1 Deadline

The European Union and the United Kingdom are likely to postpone a 10% tariff on electric vehicles traded between them that was scheduled to take effect on January 1, according to a Financial Times report published November 12. The tariff stems from post-Brexit rules of origin requirements under the EU-UK Trade and Cooperation Agreement, which set stricter battery and components sourcing thresholds that most EVs currently on the market cannot meet.

This would mark the second time the two sides have pushed back the deadline. The EU Council had already extended the original rules once in late 2023, deferring the stricter requirements through the end of 2026. European carmakers and UK industry groups, including the Society of Motor Manufacturers and Traders, had warned the tariff would hit around 70% of battery electric and plug-in hybrid models traded across the channel, with the UK car lobby estimating a cost of roughly 1.4 billion pounds, equivalent to about 1.85 billion dollars, to British manufacturers alone. A further delay would give automakers more time to localize their battery supply chains and avoid what the industry had described as a significant trade disruption.