Motoring on…? Manufacturing

It wasn’t supposed to be like this, was it?

When victorious Brexit supporters unfurled the bunting to celebrate the UK’s EU withdrawal, so too did they speak of opening a new chapter of prosperity.

But things haven’t exactly gone to script.

And now, the automotive sector, a fixture of Britain’s economy through its provision of nearly one million jobs and global links accounting for ten per cent of all UK exports*, is writing a new plot twist.

With rules of origin – and therefore tariffs – around electric vehicle parts set to change, a number of manufacturers, not least a particularly vociferous Vauxhall, have warned the Government it faces a drastic reduction in UK green motoring output, including potential factory closures, if it doesn’t force a major turn in the road.

*Society of Motor Manufacturers and Traders; www.smmt.co.uk/ industry-topics/uk-automotive registration.

Yet electrified vehicle production accounted for 30 per cent of all vehicles made in the UK.

Rules of origin pose a significant risk to the UK automotive sector, particularly for batteries.

The EU rules on parts sourcing has been in place for several years now but, as we come closer to the deadline in January, we know some manufacturers may be getting concerned that supply chains are not yet matured enough in the UK and Europe to ensure these requirements can be met.

Presently, at least 40 per cent of the content of electric vehicles, and 30 per cent of batteries, must originate from the EU.

From January 2024, though, 45 per cent of the vehicle and 50 per cent to 60 per cent of batteries must include EU content, to avoid additional tariffs.

Words by Paul Butler

Chief executive at North East Automotive Alliance