Three global carmakers are recognizing the threat of the Brexit rules on the future of the automotive industry in the UK. The transition to electric is at the risk of being knocked off course unless the UK and EU delay stricter “rules of origin” being introduced next year.
Ford, Jaguar Land Rover and Stellantis (owner of Vauxhall, Peugeot and Citroën) said the current post-Brexit rules require 40% of an electric vehicle’s parts, by value, to be sourced in the UK or EU if it is to be sold on the other side of the Channel without a 10% trade tariff.
This requirement is due to rise to 45% next year. Considering that most electric vehicle batteries are imported from Asia, and make up a large part of the cost of building a car, vehicles made in the UK and the EU are likely to not make up to the 45% rule.
A spokesperson from Ford said: “Tariffs will hit both UK- and EU-based manufacturers, so it is vital that the UK and EU come to the table to agree a solution.” Stellantis, on the other hand, might be forced to shut some of its operations in the UK, putting around 80,000 jobs at risk. Jaguar has also described the current timing as “unrealistic and counterproductive”, and called on the UK and EU to “quickly agree a better implementation solution to avoid destabilising the industry’s transition to clean mobility”.
This is the first time that carmakers have explicitly urged for the renegotiation of terms.