UK and EU electric car tariffs as green automotive surges in March. Subscribe to Electric Vehicle News Bitesize Podcast for FREE to hear more!
European and UK negotiators want to resolve an impending “cliff-edge” on tariffs on electric car components, just as the UK’s green automotive sector looks to be hitting a hot streak.
According to Politico, the UK and EU are currently working together to stop electric car manufacturers being hit by new tariffs planned for the beginning of next year.
Under rules of origin provisions contained in the UK-EU Trade and Cooperation Agreement, currently up to 70% of battery components can come from outside the UK or EU before tariffs would apply.
As part of a planned phase-in, this percentage would drop to 40% from 1 January 2024 onwards, with automotive groups on both sides of the channel calling for this date to be pushed back.
Since the rules are written into the TCA, any changes would require sign-off from the joint partnership council, which has only met twice since its inception in 2020.
However, technical talks are said to be progressing, with the Department of Business and Trade also considering next moves.
Build back batteries.
The lobby group UK in a Changing Europe has previously warned that the UK needs greater capacity in domestic battery production in order to cope with this planned change, particularly in light of the government’s Net Zero ambitions.
Whitehall’s plans to expand the UK’s green tech industry have faced headwinds, particularly after the collapse of Britishvolt in January due to financial issues.
Although the firm was later bought by Australia’s Recharge Industries, the overall effort to boost the green tech sector has faced difficulties since US president Joe Biden signed his signature Inflation Reduction Act.
The Inflation Reduction Act saw the introduction of billions of dollars in subsidies and tax breaks for North American green technology production, prompting outcry from the EU and UK.
Sky News reports that the only remaining British battery producer is mulling a plan to shift production to the US to take advantage of these subsidies.
In spite of these difficulties, UK electric car production surged this last March.
According to figures from the Society of Motor Manufacturers and Traders, published at the end of last month (28 April), total UK car production rose by 6.0% in the first quarter of 2023, with exports driving much of these gains.
Four in ten cars built in the month of March were electric, according to the SMMT, with combined volumes of hybrid, plug-in hybrids and battery powered cars increasing 75%.
Mike Hawes, SMMT’s chief executive, said that the results were “cause for optimism” and called for the UK “to match the best in global competitiveness.”
He added: “That means driving down the high cost of UK energy, reforming business rates and vigorously promoting Britain globally to secure the investments essential to a zero-carbon automotive future.”
Supply chain issues.
The Loadstar reports that European ports are approaching maximum capacity when it comes to transporting cars, with several logistics companies expanding their services in anticipation of the continuing demand for electric vehicles.
Roll-on to roll-off transport has purportedly reached capacity in the port of Antwerp-Brussels, with other European ports experiencing increased demand, as imports into Europe increase.
Four new vessels have been ordered by SAIC Anji – China’s largest carmaker – at a cost of $96m for each vessel.
Meanwhile in other news, Government considers new electric vehicle battery degradation laws.
The UK Government is working with international partners to develop new laws for monitoring the health of electric vehicle batteries.
The plans to make the fitting of battery state of health (SOH) monitors compulsory on all new EVs were discussed at last week’s meeting of the Vehicle Remarketing Association (VRA).
Abdul Chowdhury, head of vehicle policy at the Office for Zero Emission Vehicles (OZEV), explained that because the battery forms a large part of a used EV’s value and performance, providing information on its health would support consumers in making informed comparisons between vehicles and help alleviate concerns over battery degradation.
He said: “The UK government has been working with the United Nations Economic Commission for Europe and other international partners to develop technical regulations on state of health monitors and minimum battery performance standards and is currently analysing options for adopting these regulations into UK law.
“The EU is also considering options, and its Euro 7 proposals look set to bring state of health monitors in from July 2025.”
A battery state of health is an estimate of a battery’s remaining total capacity, compared to the total capacity at the EV’s production.
The Global Technical Regulations on Electric Vehicle batteries developed at United Nations Economic Commission for Europe, where many international automotive standards and regulations are set, cover two key aspects.
The first is to mandate installation of state of health monitors on EVs which must be accessible to the consumer, meet accuracy requirements and be validated through in-service testing.
The second is to set a minimum performance standard of 80% state of health from 0-5 years old or 100,000km, whichever comes first, and 70% state of health for vehicles between 5-8 years old or 100,000 to 160,000km, whichever comes first.
Other areas where Office for Zero Emission Vehicles was looking to provide support to the used Electric Vehicle sector included providing standardised Electric Vehicle information to customers at the point of sale and helping to ensure that sufficient numbers of technicians were trained to repair EVs.
Chowdhury continued: “The used market is critical to the UK’s transition to zero emission vehicles and meeting our net zero ambitions.
“It is where 80% of all cars are bought and sold, and as we move from early Electric Vehicle adopters to a mass transition, its health is critical to ensuring a fair and equitable transition for all.”
Government support has included financial incentives to stimulate the new Electric Vehicle market and increase the supply of vehicles feeding through to the used market.
Funding for charge point infrastructure at homes, workplaces, residential streets and across the wider roads network is also supporting consumers to buy used EVs, added Chowdhury.
The potential for legislation around battery monitoring comes as an advisory group of battery experts is being assembled to explore ways of promoting greater confidence in the used Electric Vehicle market.
Organised by the British Vehicle Rental and Leasing Association, the half-day event – Battery health: supercharge your knowledge – will take place on May 16.
At the VRA event, members heard that there are no Government plans for direct financial support for used Electric Vehicle purchases. However, it says that all policy options are continually under review and Office for Zero Emission Vehicles closely monitor the health of the used market and are always open to receiving any evidence.
“Used EVs continue to be among the most-discussed topics in remarketing and being able to hear directly from someone such as Abdul at the centre of Government thinking was fascinating and provided a high level of insight for VRA members,” said VRA chair Philip Nothard.
The event also featured a panel discussion on the used Electric Vehicle market and used vehicle supply in general featuring Phill Jones, chief operating officer at eBay Motors Group; Greg Smith, commercial director at Carshop Supermarket; and Michael Tomalin, CEO at both City Auctions Group and Purple Rock.
And finally, Just Eat to switch corporate sales fleet to electric by 2025.
The entire corporate sales fleet at Just Eat, currently consisting of 175 diesel vehicles, will be replaced with battery electric vehicles (BEVs) by 2025.
The fleet is used by sales teams within Just Eat to visit prospective restaurant and grocery partners and to provide ongoing support for current outlets already on its platform.
By removing fossil fuel vehicles from its fleet, it will reduce its carbon emissions by up to 480 tonnes per year.
Its lease provider, Agnew Leasing, enabled drivers to test more than 20 different models over a six-month period with a full cost analysis of all fuel types and various models.
The sales team has opted to initially replace their diesel vehicles with the pure electric Cupra Born and Volkswagen ID3, with the first 12 vehicles already joining the fleet.
Agnew Leasing’s senior account manager, Adam Patrick, said: “It has been a long journey to get to this point but the appetite of Just Eat to progress to a fully electric fleet has been the real driver behind this project.
“We are delighted to be able to continue to supply and manage Just Eat’s fleet of vehicles and are as excited about this transition as much as they are.”
Patrick also thanked Lookers for its support on this project.
The switch to electric is part of Just Eat Takeaway.com’s wider plans for transitioning 100% of its corporate and sales car fleet to electric vehicles by 2030.
In 2021, Just Eat Takeaway.com launched its Responsible Business Framework identifying key areas to drive sustainability across the industry.
Leigh Phillipson, Just Eat UK sales director, said: “Our sales team is committed to providing services to restaurant partners up and down the UK and by replacing all our vehicles with electric vehicles, we are further reducing greenhouse gas emissions and protecting our environment for future generations.”
In the UK, as part of its mission to drive sustainability through the takeaway sector, Just Eat has launched numerous campaigns.
This includes Just Eat and Notpla’s ongoing partnership to provide seaweed based compostable packaging to restaurants as well as a recent carbon labelling trial in partnership with My Emissions.
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