France has indicated that it would like to delay the introduction tariffs for electric vehicle sales in the UK and EU. This will remove a major obstacle to the creation of a new agreement over the tax due to be implemented in January.
In an interview, Olivier Becht said that France wanted to solve the problem. France was the only major voice in the EU to oppose the UK’s request for a postponement of the 10% duty on and EV.
Becht added that Paris is “open to new ideas” in relation to the postponement of the tariffs until December 31.
He added that the UK was Europe’s number one market, with a growing need for EVs. This created many opportunities for companies. “We will, of course, be paying attention to any solutions presented by the [European] Commission in order to resolve this issue. We also need to remember that it’s important to continue to encourage [battery] investment on our soil.”
According to the Post-Brexit Trade and Cooperation Agreement, EVs that are shipped across the Channel will face a 10 percent tariff if their batteries were made primarily outside of Europe or the UK.
The UK and EU auto industries said that Europe did not have the domestic battery production capacity needed to meet the rules of origin threshold. They warned that tariffs could cost billions and would stifle the demand.
Germany and other members states supported the UK’s request to delay the tax for three years. They believed that Chinese companies who already pay tariffs will be the primary beneficiaries of higher prices on EU-made electric vehicles.
According to a senior EU official who was present at the meeting in Brussels, a large country with a car industry in the EU opposed the blanket extension.
Paris stated that London could exploit a precedent created by changing the TCA to push for further changes to the agreement that has been hurting EU-UK trading ties ever since its introduction in January 2021.
Paris asked the Commission to examine ways of addressing the concerns of EU automakers without reopening TCA. The EU industry, it argued, should be able meet the TCA terms within a couple of months. Becht also said that he believed it was possible.
Officials said that the commission is examining amendments to trade rules, but officials are wary of removing incentives from the auto industry for investing in EU battery supply chain.
The European Automobile Manufacturers’ Association (EAMA) said that “patchy solutions” to the trade dispute were not enough.
Director-General Sigrid De Vries stated that “we are on the verge of a deadline which is very close.” “An extension of three years — and no less — is essential to protect the competitiveness of Europe’s electric vehicle manufacturers.”
Maros SEFCIC, vice-president of the commission, stated last week that he would “look for solutions which will be supported” by all members.
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