EU and UK Poised to Delay a 10% Tariff on Electric Cars

The European Union and the United Kingdom are poised to delay a 10% tariff on electric cars, according to Financial Times reporting relayed by the market service Newsquawk on 12 November 2026. The FT-based report refers to electric cars generally. The 10% rate for electric vehicles traded between the UK and EU is set out in electrive’s June 2026 account, which gives the scheduled start date as 1 January 2027.

The reporting describes the delay as expected rather than confirmed, and does not say how long a delay would last. The FT-based reporting links the move to concerns about Chinese competition, while electrive’s June account centres on rules of origin.

How the 10% Tariff Is Triggered

Electrive reported in June 2026 that a 10% tariff applies to electric vehicles traded between the UK and EU if any one of three rules of origin is not met. The rules come from the 2020 Brexit agreement and were originally due to take effect on 1 January 2024. They received a last-minute three-year postponement, which puts the scheduled deadline at 1 January 2027.

The first rule requires 55% of the value added in car production to come from Europe, with the EU and UK counted together. For electric vehicles, 70% of the battery pack and 65% of battery cells must also be made in Europe. Missing any one of the three thresholds triggers the 10% rate.

The International Trade Administration’s trade.gov note on the 2023 extension says the rules apply to vehicles traded in both directions. Vehicles that do not meet the thresholds would face a 10% tariff.

Electrive describes the 65% cell requirement as already hard to meet when the delay was agreed. A limited number of models use cells from European plants, such as those of CATL and PowerCo in Germany, and most cells still come from Asia.

The Rule Behind the Tariff
Under the arrangement electrive described in June 2026, electric vehicles traded between the UK and EU face a 10% tariff if any of three rules of origin is not met, with the scheduled start date set at 1 January 2027.

How the Thresholds Were Set and Extended in 2023

Pinsent Masons reported on 15 December 2023 that the European Commission had postponed the 2024 requirements, extending the tariff-free period for UK manufacturers. The Commission cited unforeseen circumstances, including Russia’s aggression in Ukraine and soaring energy bills. Commissioner Maroš Šefčovič described the postponement as a one-off, and the article says a further delay would not be legally possible until 2032.

Trade.gov dates the agreement on the three-year extension to 21 December 2023. It moved the schedule from 2024 to 2027 and lists the 2027 requirements as 55% of overall vehicle value and 65% to 70% of battery content. Electrive’s June 2026 figures of 70% for the pack and 65% for cells sit within that range.

The earlier thresholds are described differently. Trade.gov gives 40% of vehicle value and 30% of battery content as the requirement until 2027, and 50% for battery cells and 60% for battery packs under the original 2024 schedule. Pinsent Masons gives 45% of electric vehicle parts in the original 2024 requirement, and says the interim rules were due to run until the end of 2026. The figures for this period differ between the two sources.

Industry Groups Have Called for a Further Delay

According to electrive, the UK trade body SMMT and the European automotive association ACEA called for a further delay in June 2026. Electrive describes the request both as a call for a further delay and as a call for suspension of the tariffs. It attributes the SMMT position to chief executive Mike Hawes. For ACEA, it cites director of international trade Jonathan O’Riordan and director general Sigrid de Vries, who spoke to the Guardian.

Hawes said battery supply chains are not yet ready for the requirements, which were based on assumptions that have not materialised despite major investment. He urged the UK and EU to find a pragmatic solution that avoids self-defeating tariffs on the vehicles consumers are being urged to buy.

De Vries said the development of battery propulsion in Europe is progressing far too slowly and called for a shift in policy at the European Commission. O’Riordan estimated that only 20% of EV batteries would be produced in Europe by the end of 2026/27. That estimate concerns battery production.

Pinsent Masons also reported in December 2023 that the SMMT had earlier warned the strict rules could result in a price hike of £3,400 for electric battery vehicles made in the UK, adding billions to costs. That warning predates the 2026 requests.

The reporting describes the delay as expected rather than confirmed.

Reasons Given and What Is Not Yet Confirmed

The two accounts give different reasons for the pressure. The FT-based reporting cites concerns about Chinese competition. Electrive frames the issue around rules of origin and battery supply. Both are reported positions.

Electrive reports that sources close to BMW’s new CEO indicated that planned fully electric Minis at Oxford could become uneconomical due to the impending Brexit tariffs. In another passage, electrive describes an insider quoted by Wirtschaftswoche as saying BMW would be unable to produce and sell any electric vehicles at the Mini’s main European plant if the agreed trade rules come into force as planned on 1 January 2027. Electrive suggests the warning is likely an initial move by BMW to push for a delay.

Electrive further reports that a European Commission spokesperson told the Guardian that discussions on these and related topics can take place within the ongoing EU-UK negotiations. The spokesperson added that the Commission is in constant contact with EV-sector stakeholders to assess their readiness to meet the rules of origin. Electrive reports that the Brexit tariffs and the ‘Made in EU’ rules are expected to be negotiated together.

France has proposed including the UK in the ‘Made in EU’ rules under the Industrial Accelerator Act. Under that plan, electric vehicles and other goods would need a high share of EU value added to qualify for subsidies or public procurement.

What It Means for Exporters Between the EU and UK

Under the rules as electrive describes them, manufacturers and suppliers shipping electric cars or batteries between the two markets face a 1 January 2027 deadline.

The figures to track are the three thresholds: 55% European value added in car production, 70% of the battery pack and 65% of battery cells. It is not yet known whether a delay would change the thresholds or only the date.

The SMMT news page lists a report titled ‘UK Automotive Supply Chain: From Risk to Industrial Growth’ dated 12 November 2026, the same day the delay was reported. The page also lists a separate 12 November item on critical auto suppliers.

For companies planning shipments into 2027, the June reporting gives the terms. The November reporting describes a delay as expected but gives no date for it.