By GB News (World News) | Created at 2026-09-21 12:27:38 | Updated at 2026-09-21 13:16:03
1 hour ago
The UK could be slapped with a huge bill within years unless the European Union adjusts its trade policy, an automotive industry giant has warned.
In a letter to the leaders of the European Union, the European Automobile Manufacturers Association (ACEA) has urged the bloc to amend the battery Rules of Origin in the EU-UK Trade and Cooperation Agreement (TCA).
The industry voice has warned that requirements set to be introduced in January 2027 cannot be met by automotive manufacturers across the continent.
It highlights that the EU is expected to export more than half a million electric passenger cars and vans to the UK next year, worth a staggering €17.9billion (£15.4billion).
However, 82 per cent of these exports may fail to meet incoming Rules of Origin requirements, meaning these vehicles would face a 10 per cent customs duty.
This would result in an estimated cost of €1.87billion (£1.6billion) in 2027 alone, and is likely to grow dramatically over the coming years as more drivers make the switch to electric.
ACEA has therefore warned that the UK and European automotive relationship could face serious strain, as well as hampering the uptake of EVs.
The TCA outlines that 55 per cent of the vehicle's value must come from the EU or the UK from January 2027, compared to a 40 per cent target in 2023.
The European Automobile Manufacturers Association has called on the EU to delay new EV export rules
GETTY
Similar targets will be hiked on January 1, 2027, including 70 per cent of the battery pack and 65 per cent of the battery cell coming from the EU or UK.
Any vehicles or batteries which fail to meet these requirements will face a 10 per cent tariff on either end of the UK-EU border.
The ACEA's letter calls on the EU to introduce a "time-limited change to the rules for batteries" to avoid the "catastrophic effect of widespread incompliance".
It proposed a 2029 deadline for a flexible rule for the battery pack assembly requirements, before becoming more restrictive in 2030.
The UK is expected to import more than 500,000 electric cars from the EU next year
At this point, the UK will ban the sale of new petrol and diesel vehicles, making the potential losses from the Rules of Origin even more significant.
The letter stated: "We recognise that the EU and UK already took a decision in 2023 to extend flexible rules until the end of this year.
"We also acknowledge that there are voices that will oppose any continued flexibility and accuse the automobile sector of acting in bad faith in regard to an integrated supply chain for batteries in Europe.
"However, we have many well-established investments across the industry that we can point to as proof of our localisation intentions. It is not a question of 'if' we will comply with such rules but only of 'when'."
The letter was signed by ACEA President Ola Källenius, who is also Chairman of Mercedes-Benz, and Sigrid de Vries, Director-General of the ACEA.
Only new zero emission vehicles will be on sale from 2035 onwards in the UK, amid pressure to develop the UK's electric vehicle and battery infrastructure.
A recent report from New AutoMotive found that more than £7billion has been committed to EV battery projects across the UK.
Despite this, more needs to be done to stimulate investment, which could be at risk if Labour give the green light to Zero Emission Vehicle mandate changes.
