The Association of the Automotive Industry (VDA) is proposing measures aimed at preventing the introduction of new auto tariffs between the EU and Great Britain, which are slated to begin in 2027. According to a position paper cited by Politico, VDA President Hildegard Müller stated that the planned tightening of the rules of origin must be postponed urgently to prevent damage to the automotive industries in Germany, Europe, and the United Kingdom.
Under the Brexit trade agreement, the EU and the UK established certain rules of origin. These rules stipulate that, starting in 2027, the share of value creation in battery manufacturing within Great Britain or EU countries must reach 70 percent. Failure to meet this requirement would result in the introduction of mutual tariffs amounting to ten percent. The VDA warns that, given the current difficulty in meeting this mandated threshold, a vast majority of EU car exports would be affected by these new tariffs.
In its position paper, the association put forth concrete proposals for vehicle and battery categories to facilitate the necessary increase in battery production. The VDA cautions that this “severe trade barrier” would not only threaten market shares, value creation, and jobs but would also hinder rather than promote the construction of a competitive European battery industry.
The association estimates that a ten percent tariff would cost €1.47 billion in 2027 alone. Furthermore, the UK is the largest export market for German car manufacturers, primarily because, unlike the USA and China, they do not operate their own factories there. German electric cars currently hold a 44 percent market share in Britain.
