Parliament’s European scrutiny committee has raised concerns over the UK and EU’s deal to prevent electric vehicle exports being hit by post-Brexit tariffs.

Last year, the EU and UK reached an agreement that avoided a so-called ‘tariff cliff edge’, delaying the introduction of post-Brexit tariffs by three years.

European and UK industry had called for changes to the UK-EU Trade and Cooperation Agreement (TCA), signed following the UK’s departure from the bloc, to remove origin rules that would have imposed a 10% duty on cars with batteries manufactured outside the UK and EU.

In its fifth report, published yesterday (13 February), the House of Common’s European Scrutiny Committee said it would be asking for more information on the government’s plans for the next few years, raising concerns about the new deadline in 2026.

2026 deadline

While stating that the agreement postponed concerns until 2026, the committee asked “what will happen at the end of 2026?”, as the TCA’s Partnership Council had been prevented from extending the rules of origin requirements for electric vehicles.

“Currently, the UK is only on target to satisfy a little over half the capacity the nation needs by 2030,” the committee said, as well as a “a limited window in the next three years to attract further investment in this sector”.

The committee went on to question the government’s plan to support the UK’s domestic manufacturing capacity and how they are going to ensure we have the relevant resources and are competitive when the new UK/EU rules of origin apply at the end of 2026.

Joint interests

Fergus McReynolds, Institute of Export & International Trade (IOE&IT) EU & international director said:

“Last year’s agreement between the UK and EU was very welcome, as it avoided an additional tax of 10% on electric cars sold between the UK and the EU during the height of a cost of living crisis which would have disincentivised the transition to more climate-friendly cars.

“It is in the interest of both the UK and the EU to work together on reducing carbon emissions and the committee is right to ask the government how it will achieve its goal of ensuring that an additional charge is not levied in 2027.”

Bill Cash, a Conservative MP and chair of the committee, said he was writing to the minister for Europe, Leo Docherty, asking for more information on what was going to happen once the three-year extension expires and requesting a “thorough assessment” of how the UK will increase its domestic capacity before this date.

The agreement by the Partnership Council, a joint committee featuring EU and UK representatives, would prevent a further extension of the decision until 2032, according to Cash’s letter.