Britain’s car manufacturers are facing new tariffs on electric vehicles (EVs) they sell into the European Union after a temporary post-Brexit exemption comes to an end. From the end of 2026, the EU is expected to impose taxes of up to 10% on UK-made EVs exported to EU member states, under the bloc’s “rules of origin” requirements.
The tariffs stem from strict EU customs rules that require a vehicle to contain a minimum proportion of EU or UK-sourced content — including batteries — in order to qualify for duty-free trade. UK and EU manufacturers have struggled to meet these thresholds because the battery supply chain remains heavily reliant on imports from Asia.
Under the post-Brexit Trade and Cooperation Agreement, the EU agreed to delay applying these tariffs until the end of 2026 in recognition of supply chain challenges. When the exemption expires, UK carmakers could be charged up to 10% on EVs shipped to the EU unless they significantly increase locally sourced content.
Industry concerns over price rises and competitiveness
Industry bodies, including the Society of Motor Manufacturers and Traders (SMMT), have warned that these tariffs could raise prices for consumers in both Britain and the EU and damage the competitiveness of UK-built electric cars. There are also fears the prospect of tariffs might dampen investment in UK automotive manufacturing at a critical stage for the transition to zero-emission vehicles.
Automakers and trade groups have urged further negotiations with Brussels as part of wider UK-EU talks to extend or adjust the tariff arrangements beyond 2026, but no final agreement has been confirmed.
Implications for UK EV market and 2030 targets
The looming tariffs could also create additional hurdles for the UK government’s plans to phase out new petrol and diesel cars by 2030, as higher costs and supply chain constraints make it harder for UK manufacturers and consumers to fully embrace electric vehicles.
