London Daily

Focus on the big picture.
Wednesday, Jul 02, 2025

Rishi Sunak talking to EU over threat to UK electric cars

Rishi Sunak talking to EU over threat to UK electric cars

The UK is lobbying the EU over a Brexit trade deal deadline that carmakers have warned pose a threat to UK industry.
Prime Minister Rishi Sunak said the UK was "engaged in a dialogue" with the EU about a looming rule change that could affect UK electric car hopes.

Carmakers in Britain and the EU have been asking for the rule change to be pushed back.

Stellantis, which owns Vauxhall, Peugeot, Citroen and Fiat, has said that its UK factories are at risk.

The company has previously committed to making electric vans in the UK, but now says these plans are under threat.

It has warned it could face tariffs of 10% on exports to the EU due to rules on where parts are sourced from.

Under current rules, 40% of the value of an electric vehicle should originate in the UK or EU to qualify for trade without tariffs.

However, this percentage will rise to 45% from the beginning of next year, while for battery packs the threshold will be 60%.

From 2027, the bar is raised even higher, to 55% for the value of an electric vehicle and 70% for battery packs.

Stellantis said it was "now unable to meet these rules of origin" due to the recent surge in raw material and energy costs.

Europe's car trade body, the European Automobile Manufacturers' Association, has also asked the EU to extend the deadline, arguing that the supply chain is not ready.

Speaking to reporters in Japan where he is attending a G7 summit, Mr Sunak said the approaching deadline was "something that car manufacturers across Europe, not just in the UK, have raised as a concern".

"And as a result of that we are engaged in a dialogue with the EU about how we might address those concerns when it comes to auto manufacturing more generally," he added.

Mike Hawes, chief executive of UK trade body, the Society of Motor Manufacturers and Traders (SMMT), said he hoped "some degree of common sense would prevail".

"It doesn't need a full renegotiation of the Brexit deal, it just needs an agreement that you won't [implement] some of the rules that were due to change next year," he told the BBC's Today programme.

"It's hard to see how you can make sure that your plant is competitive for the long term if you're facing these additional costs. It undermines the investments either that have been made or potentially will be made."

Industry experts have expressed concern that the UK is running out of time to develop its own battery manufacturing industry, given heavy investment being made in the US, China and the EU.

Mr Hawes said the UK had not missed the boat yet, "but the boat has got its engines fired up, ready to go".

"What we've seen over the last few years is these massive investments being made in terms of gigafactories and indeed product allocation. That window isn't shut, but it's closing."

Regarding these concerns, Mr Sunak said: "Nissan have invested a billion pounds in battery manufacturing capability in the North East.

"I'll be talking to the Nissan CEO and other Japanese business leaders later about investment into the UK."

Business and Trade Secretary Kemi Badenoch said on Thursday that the issues raised by the car industry were not to do with Brexit.

"The issue that the automotive industries are talking about is around rules of origin. This is something that the EU are also worried about because the costs of the components have risen," she told the Commons during business and trade questions."This isn't to do with Brexit, this is to do with supply chain issues following the pandemic and the war in Russia and Ukraine."I actually have had meetings with my EU trade counterpart, we are discussing these things and looking at how we can review them."

Ahead of Mr Sunak's meeting with business leaders in Japan, the government announced that Japanese firms had committed to invest nearly £18bn in the UK.

The government said the investment would create jobs, fund offshore wind, other clean-energy projects and affordable housing, with Mr Sunak calling it a "massive vote of confidence" in the UK economy.

However, Labour said foreign investment in the UK had plummeted under the Conservatives.
Newsletter

Related Articles

0:00
0:00
Close
Poland Implements Border Checks Amid Growing Migration Tensions
Political Dispute Escalates Between Trump and Musk
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
US Senate Votes to Remove AI Regulation Moratorium from Domestic Policy Bill
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
Jury Deliberations in Diddy Trial Yield Partial Verdict in Serious Criminal Charges
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
King Charles Plans Significant Role for Prince Harry in Coronation
Two Chinese Nationals Arrested for Espionage Activities Against U.S. Navy
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
Trump Administration Considers Withdrawal of Funding for Hospitals Providing Gender Treatment to Minors
Texas Enacts Law Allowing Gold and Silver Transactions
China Unveils Miniature Insect-Like Surveillance Drone
OpenAI Secures Multimillion-Dollar AI Contracts with Pentagon, India, and Grab
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Elon Musk Critiques Senate Budget Proposal Over Job Losses and Strategic Risks
Los Angeles Riots ended with Federal Investigations into Funding
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Education Secretary Announces Overhaul of Complaints System Amid Rising Parental Grievances
Massive Anti-Government Protests Erupt in Belgrade
Trump Ends Trade Talks with Canada Over Digital Services Tax
UK Government Softens Welfare Reform Plans Amid Labour Party Rebellion
Labour Faces Rebellion Over Disability Benefit Reforms Ahead of Key Vote
Jeff Bezos and Lauren Sánchez Host Lavish Wedding in Venice Amid Protests
Trump Asserts Readiness for Further Strikes on Iran Amid Nuclear Tensions
North Korea to Open New Beach Resort to Boost Tourism Economy
UK Labour Party Faces Internal Tensions Over Welfare Reforms
Andrew Cuomo Hints at Potential November Comeback Amid Democratic Primary Results
Curtis Sliwa Champions His Vision for New York City Amid Rising Crime Concerns
Federal Reserve Proposes Changes to Capital Rule Affecting Major Banks
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Trump Escalates Criticism of Media Over Iran Strike Coverage
Trump Announces Upcoming US-Iran Meeting Amid Controversial Airstrikes
Trump Moves to Reshape Middle East Following Israel-Iran Conflict
Big Four Accounting Firms Fined in Exam Cheating Scandal
NATO Members Agree to 5% Defense Spending Target by 2035
Australia's Star Casino Secures $195 Million Rescue Package Amid Challenges
UK to Enhance Nuclear Capabilities with Acquisition of F-35A Fighter Jets
Russian Shadow Payments via Cryptocurrency Reach $9 Billion
Explosions Rock Doha as Iranian Missiles Target Qatar
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
×