No deal would drain EV future says SMMT

Published:  22 October, 2020

The prospect of an EV future for garages could be killed off by a no deal Brexit, as the resulting trade tariffs would all-but negate the UK’s plug-in car grant, the SMMT has warned.

The 10% no deal WTO tariff would add at least £4.5 billion to the annual cost of fully assembled cars traded between the UK and the EU, with an average hike of £1,900 per EU-built vehicle sold in the UK, the SMMT has said. However, the body also calculated that no deal would mean a £2,800 cost increase for fully electric cars, which would effectively void the £3,000 plug-in car grant.

This tariff would also add around £2,000 on to the average cost of UK-built battery electric cars exported to the EU, rendering UK output less competitive and the UK far less attractive as a manufacturing investment destination.

UK car buyers are set to register some 78,000 battery electric vehicles (BEVs) this year, with further growth expected in 2021. However, the SMMT has estimated that tariff increases could reduce BEV demand next year by at least 20%.

Commenting on the figures, SMMT Chief Executive Mike Hawes said, “Just as the automotive industry is accelerating the introduction of the latest electrified vehicles, it faces the double whammy of a coronavirus second wave and the possibility of leaving the EU without a deal. As these figures show, ‘no deal’ tariffs will put the brakes on the UK’s green recovery, hampering progress towards net zero and threatening the future of the UK industry.

He added: “To secure a truly sustainable future, we need our government to underpin industry’s investment in electric vehicle technology by pursuing an ambitious trade deal that is free from tariffs, recognises the importance of batteries in future vehicle production and ensures consumers have choice in accessing the latest zero emission models. We urge all parties to re-engage in talks and reach agreement without delay.”

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