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The
Commission also said it was setting aside an additional 3
billion euros ($3.24 billion) to boost the EU's battery
manufacturing industry, a move designed to boost local content
and reduce reliance on batteries and materials from China.
The post-Brexit Trade and Cooperation Agreement (TCA) says that,
to qualify for zero tariffs, at least 55% of the value of EVs
need to be from the European Union or Britain, with values of
65% for battery cells and modules and 70% for battery packs.
However, it contains two transition periods, the first with EVs
requiring 40% local content and battery packs and components
30%, the second for 2024-2026 at 45% for EVs, 50% for battery
cells and modules and 60% for battery packs.
Import tariffs of 10% apply for EVs falling short of those
requirements.
The proposal is to extend the first transition period for three
years to 2027, when the full local content requirements of the
TCA will apply. The second transition period will not apply.
European Commission Vice President Maros Sefcovic, who oversees
EU relations with Britain, said that Russia's invasion of
Ukraine and soaring energy prices, along with support schemes of
rivals, meant that EU battery production had not scaled up as
planned.
Given batteries represent 30-40% of a car's value and that most
are from China, many carmakers argued they would have struggled
to meet the content requirements of the second transition
period.
($1 = 0.9267 euros)
(Reporting by Philip Blenkinsop;Editing by Elaine Hardcastle)
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