A tariff on local content, which threatened to push up the price of EVs made in the UK and those made in the EU and exported to the UK, has been postponed until 2026. 

The European Union Council has now approved the decision to delay the tariff that is necessary because of Brexit agreements. This was due to be introduced on January 1st. 

Under the delayed rules, the European Union planned to impose a 10% duty on electric vehicles going from the UK to the EU, if less than 45% of the value comes from the region. With batteries and other electrical components often made in Asia, most UK made EVs would be unable to meet this threshold. The delay has been put in place to encourage more local battery manufacturing. 

Carmakers lobbied for the delay, as they feared that without local battery supply, they would be less competitive on price with Chinese car makers. 

There were serious concern from EV makers such as Stellantis, which makes Vauxhall vans in the UK, that British car plants would face closure if the tariff was imposed on the original timescale.