The European Commission is reportedly considering another delay to tariffs on electric vehicle trade between the EU and the UK, which are due to take effect in 2027. The UK government is also said to support the postponement. Automakers have warned that the proposed 10% duty could put them at a competitive disadvantage.
According to the Financial Times, the European Commission is consulting industry representatives on a possible delay. The UK is also backing the move. Without an agreement, a 10% tariff will apply to certain electric vehicles traded between the two markets from January 1, 2027.
The UK exports models such as the Nissan Leaf and several Stellantis electric vans to the EU. At the same time, it imports a wide range of electric vehicles from EU countries. The proposed tariffs are linked to the rules of origin under the post-Brexit trade agreement. These rules require a growing share of an electric vehicle’s value to come from the EU or UK.
The current transitional arrangements expire at the end of 2026. From 2027, at least 55% of a vehicle’s value must originate in the EU or UK. The regional content requirements are higher for batteries, reaching 65% for cells and modules and 70% for battery packs. Vehicles that fail to meet these requirements would face a 10% import tariff.
The European automotive industry believes the stricter requirements are being introduced too early, as domestic battery production is still developing. The European Automobile Manufacturers’ Association (ACEA) estimates that around 520,000 electric cars and vans worth €17.9 billion will be exported from the EU to the UK in 2027. Of these, approximately 426,000 vehicles, or 82%, would fail to meet the new rules of origin.
This could result in additional tariff costs of around €1.47 billion in 2027 alone. Automakers also fear that the duties could weaken their position against Chinese competitors in the UK market.
In September, ACEA proposed a gradual extension of the existing rules. Under its proposal, assembling the battery pack in the EU or UK would remain sufficient until the end of 2029. From 2030, battery cells would also need to be sourced from the region. The requirement for active cathode materials would follow in 2032. However, the European Commission is considering shorter transition periods than those proposed by ACEA.
At least two proposals are reportedly under consideration. The first involves a one-year delay. The second would give automakers two years to offset non-compliant vehicles using batteries sourced from outside the EU and the UK by selling compliant models in their domestic markets. This would allow manufacturers to balance exports with local sales. The proposed delay has also drawn opposition from the European chemical industry. Several companies have already invested heavily in European production of active cathode materials. They fear that postponing the rules could further delay demand for their products.
The European Commission now faces a difficult balancing act. The rules aim to encourage investment in Europe’s battery supply chain. However, implementing them too soon could increase costs for automakers and put them at a competitive disadvantage in the short term.
The discussions come as the EU prepares its ‘Made in Europe’ policy under the Industrial Accelerator Act. The plan aims to give EU-made products priority in public procurement and state funding, including support for electric vehicles. The European Commission and the UK could potentially agree on a broader deal. This could combine a delay in EV tariffs with equal treatment for the UK under the proposed ‘Made in Europe’ rules.
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