The Financial Times reported on 12 November 2026 that the European Commission and the United Kingdom are consulting industry about postponing a 10% tariff that would otherwise apply to most electric vehicles traded between the EU and the UK from 1 January 2027.
How the tariff would work
Under the post‑Brexit Trade and Cooperation Agreement, vehicles traded tariff‑free must meet progressive ‘rules of origin’ thresholds: at least 55% of a vehicle’s value must come from the EU or UK, with higher minimums for battery components — 65% for cells and modules and 70% for battery packs. If those thresholds are not met, a 10% import tariff can be applied from 1 January 2027. The requirement and the January 1, 2027 timetable are set out in reporting that summarised Commission and treaty rules.
Background
The origin rules were designed to accelerate investment in European and British battery supply chains by creating a demand signal for locally produced cells, modules and key materials. The schedule has already been shifted once before; industry lobbying and government discussions have continued as battery and cathode chemical production in Europe have lagged the policy’s original timetable. The Financial Times reporting says Brussels is now consulting options ranging from a one‑year postponement to more complex flexibility schemes.
What this means for the market
A delay would give carmakers and suppliers more breathing room before strict origin tests kick in, but it also reduces near‑term guaranteed demand for EU battery and cathode makers. Industry association ACEA estimates a large share of EV trade would be affected under the current rules: roughly 82% of around 520,000 EVs and vans expected to be traded in 2027 could fail the tighter origin tests and face tariffs — a volume ACEA values in the order of €17.9bn.
British industry lobby SMMT warned that UK‑EU automotive trade is tightly integrated: Mike Hawes, SMMT chief executive, said the two markets are “bound by €80bn in annual automotive trade” and called for “a pragmatic solution to 2027 rules of origin, and stronger integrated supply chains.” The SMMT comment was posted in industry responses to the reports on 12 November 2026.
Officials reportedly expect substantive talks on the timetable to follow the EU‑UK summit scheduled for 20 November 2026; no formal decision had been announced at the time of reporting. That leaves manufacturers, many with supply chains stretching into Central and Eastern Europe, to weigh near‑term trading stability against the original industrial objective of moving more battery value‑creation into Europe.
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Sources: Financial Times, Reuters
