Carmakers express concern over custom duty

Wednesday 25th October 2023 05:56 EDT

UK automakers have issued a warning about an impending 10 per cent customs duty increase for electric cars crossing the Channel. When the UK exited the European Union in early 2021, a last-minute free trade agreement removed tariffs on automobiles.
However, beginning January 1, 2024, under the "rules of origin" stipulation for border-crossing goods, a minimum of 45 per cent of the vehicle parts' value must originate from either the UK or the European Union to be exempt from customs duties. The Society of Motor Manufacturers and Traders (SMMT), an industry body, has stated that this change could result in an additional £3,600 to the cost of each UK-made car sold in Europe and a similar increase for European vehicles headed in the opposite direction. SMMT chief executive Mike Hawes noted that the UK holds significant importance as a market for European manufacturers, while the EU serves as the primary market for UK exporters.
It's worth mentioning that electric car batteries, a substantial component of the sale price, frequently originate from China, despite the UK's initiatives to establish its own giga factories for their production.

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