EU and UK sign off deal providing much-needed certainty for EU EV manufacturing

The EU and UK have on December 21 signed off on extending current battery and electric vehicle (EV) rules of origin under the Trade and Cooperation Agreement (TCA). European manufacturers have welcomed this solution, which will help support the competitiveness of Europe’s burgeoning electric vehicle manufacturing industry.

“The long-awaited deal to extend rules of origin by three years provides much-needed certainty to Europe’s growing electric vehicle battery supply chain. Instead of penalising green industries, today’s decision is recognition that it takes time to build up emerging value chains,” noted Sigrid de Vries, ACEA Director General. “It is also a strong signal that the EU is willing to uphold the competitiveness of its critical industries – the deal has potentially avoided a hefty 4.3 billion euros in tariff costs and saved some 480,000 units of electric vehicle (EV) production.”

Yesterday’s decision comes as a report published last week indicates the massive challenges for Europe’s EV manufacturing sector. Backed up by comprehensive strategies to boost domestic supply chains and homegrown EV industries, the report notes that the EU is at risk of losing ground to Chinese and US competitors. “Unlike China and the US, the EU lacks a robust industrial strategy to boost electric vehicle manufacturing,” added de Vries. While we applaud today’s hard-fought decision, we must build on this positive collaboration to solve the immense challenge of building a mature EV battery supply chain in Europe.”

De Vries said: “Vehicle manufacturers want to lead Europe’s green transition and build the future of EV manufacturing in Europe – for the benefit of all Europeans. Building on today’s constructive decision from law makers, the focus should turn to framing a holistic EU industrial strategy for the entire green value chain, from R&D, mining, refining and manufacturing; to charging networks, energy supply, purchase incentives, and recycling.”

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