The European Union is downplaying the chances of a deal with the UK on car factory rules happening any time soon.
(Bloomberg) — The European Union is downplaying the chances of a deal with the UK on car factory rules happening any time soon.
Several EU officials with knowledge of the talks said there has been no major breakthrough and they had no reason to think a resolution to the issue is imminent.
The British government has until the end of the year to negotiate a way around a commitment in its Post-Brexit EU trade that requires 45% of the components in electric cars to be sourced in either the UK or the EU for manufacturers to retain tariff-free access to the EU market.
Stellantis NV, which is retooling its Ellesmere Port site in northern England to make electric vans, said it’s unable to meet those local content requirements while Japan’s Nissan Motor Co. has said assembling cars in Britain may become too expensive after the new rules kick in.
UK Business and Trade Secretary Kemi Badenoch had earlier this week suggested that a solution to the cliff edge might be within reach. “We should see an answer soon,” she told Stephanie Flanders, Bloomberg News’s head of economics and government, at the Qatar Economic Forum in Doha.
The EU officials said it wasn’t clear what had prompted Badenoch’s comments. A UK official said both sides are in discussions over the issue and remain hopeful it will be resolved.
Bloomberg has previously reported that the UK is lobbying the EU to delay the introduction of local manufacturing requirements, due to kick in next year, an effort later confirmed by UK Prime Minister Rishi Sunak.
Without a deal, car manufacturers operating in the UK will face export tariffs of 10% on any vehicles they ship to the EU market.
–With assistance from Alex Wickham, Jorge Valero and Ellen Milligan.
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