Faulty ignition

4 Jan 2021 By Christopher Thompson Follow @CGAThompson

Britain’s motor industry has escaped European Union tariffs that would have hobbled half its output. But to meet export rules on low-carbon vehicles by 2024, Prime Minister Boris Johnson needs to ramp up battery output. Convincing groups like Nissan and BMW to stay will be tough.

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Britain’s trade deal with the European Union stipulates that a maximum of 45% of a car’s total value can come from components outside the UK or EU in order to receive tariff-free access into the European market, according to the agreement text published on Dec. 25.

The maximum proportion of foreign content for hybrid and battery cars is set at 60% until the end of 2023. The threshold will then drop to 55% until the end of 2026.

British car production was down by almost a third year-on-year in the 11 months to November 2020 due to Covid-19 restrictions and the approach of a possible Brexit shock, the Society of Motor Manufacturers and Traders said on Dec. 23.

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