The European Union (EU) Commission has unveiled a proposal to delay the implementation of electric car tariffs between the United Kingdom and the EU by three years. This announcement follows the confirmation of an additional funding injection of up to three billion euros to support the expansion of the battery industry within the EU.
As outlined in an official communication from the EU Commission, the proposed extension of the rules of origin for electric cars until 2027 is expected to be ratified with the support of member states. The majority of EU nations are reportedly in favor of this solution, aligning with the preferences expressed by both the automotive industry and the British government.
The Commission emphasizes that this extension is a one-time measure, set to last until December 31, 2026. The proposal includes a legal provision preventing further extensions beyond this period, thereby solidifying the rules of origin that will be effective from 2027.
Regarding the additional funding of up to three billion euros allocated for the battery industry, the Commission provided limited specifics. The support is intended to benefit “the most sustainable European battery manufacturers” over a three-year period, fostering positive impacts throughout the entire European battery value chain, particularly in the upstream segment, and supporting the assembly of electric vehicles in Europe.
However, one aspect that has raised questions pertains to the “specific financial incentives” aimed at accelerating support for the manufacturing of sustainable batteries in Member States. Critics have pointed out concerns over the perceived sluggishness of previous EU funding programs compared to more accessible and sometimes higher subsidies attracting battery manufacturers in North America.
In response to potential concerns about increased dependence on Chinese batteries, the Commission’s proposal includes financial support for the European battery industry. Politico had previously reported on the emergence of a “package of financial support” to address member states’ worries about potential vulnerabilities resulting from the rule change.
The official proposal will now undergo discussions in the Council, where signs of approval have already been noted. Subsequently, a Council decision will establish a unified EU position in the Partnership Council, the highest decision-making body governing the trade and cooperation agreement between the EU and the UK.
