On Thursday, the European Union and the United Kingdom reached an accord to extend the deadline for electric vehicle (EV) manufacturers to adhere to local content regulations until the conclusion of 2026.
This delay prevents tariffs on electric vehicles traded between the EU and the UK.
The extension, stretching beyond the initial 2024 cutoff, is anticipated to result in substantial savings of up to £4.3 billion ($5.45 billion) in additional expenses for both manufacturers and consumers, as affirmed by the British government.
Notably, the UK and the EU represent each other’s primary export markets for electric vehicles, actively promoting them as environmentally friendly alternatives to traditional internal combustion engine vehicles running on gasoline or diesel.
Earlier this month, the EU suggested extending the timeline. The proposal was subsequently presented to the EU Council, which officially approved it on Thursday.
“We have been listening to concerns of the sector throughout this process, and I know this breakthrough will come as a huge relief to the industry,” British Prime Minister Rishi Sunak said in a statement.
“We are also leaving no stone unturned to bolster our domestic battery industry and deliver long term certainty for our thriving automotive sector to help them grow their roots in the UK,” the PM added.
In May, Stellantis, the owner of Fiat and one of the global automotive giants, cautioned that British car plants could potentially shut down if the rules were implemented in 2024, as originally scheduled.
The trade association representing the UK motor industry praised the extension of the trade rules.
