Three of the world’s largest carmakers have told the British government it needs to renegotiate its Brexit deal with the EU to change rules they say threaten UK electric vehicle production.

The Vauxhall maker, Stellantis, has warned it will be unable to keep its commitment to make electric vehicles in Britain without the changes, while Ford has called them a “pointless cost”. Jaguar Land Rover, the biggest UK automotive employer, also said the timing of new rules was “unrealistic”.

The trade and cooperation agreement (TCA) between London and Brussels was signed in 2020, so why is it suddenly an issue?
What is the problem?

Stellantis, which also owns the Citroën, Peugeot and Fiat, DS, Jeep, Alfa Romeo, Maserati and Abarth brands, says it is struggling to meet the TCA’s “rules of origin” that require 40% of an electric vehicle’s parts by value to originate in the UK or EU in order for it to qualify for trade without tariffs.

This threshold is due to rise to 45% next year and then in 2027 it will increase to 55% and the battery pack will have to come from the UK or EU.

Carmakers who do not comply face paying tariffs of 10% when they come to sell their finished vehicles on the other side of the Channel, making it harder for them to compete with cheaper rival models from east Asia.

Stellantis, which employs more than 5,000 people in the UK, including 1,000 at its electric van factory in Ellesmere Port, Cheshire, and 1,200 at its Luton plant, says these requirements make production in the UK unviable, and it is calling on the government to strike a fresh agreement with the EU to maintain existing rules until 2027.

Ford, which has invested £380m growing its e-motor capacity at its plant in Halewood, Merseyside, also issued a statement on Wednesday calling for the three-year delay to the rule change while the UK and EU improve their battery production capacity.

Stellantis says it will have no choice but to wind down operations, putting thousands of jobs at risk. “If the cost of EV manufacturing in the UK becomes uncompetitive and unsustainable, operations will close,” it argues in its submission to a House of Commons inquiry into electric car production.

“Manufacturers will not continue to invest and relocate manufacturing operations outside the UK. The closing of UK manufacturing will see significant job losses, the loss of a skilled workforce and a negative impact to the UK economy.”

David Bailey, a professor of business economics at the Birmingham business school, calls the problem an “existential threat to the UK car industry”, telling BBC Radio 4’s Today programme that the rules in the current Brexit agreement “put the UK at a competitive disadvantage”.

Andy Palmer, the chair of the European battery manufacturer InoBat, told the same programme that 800,000 jobs in the UK associated with the car industry were under threat. “If you can’t meet these local content rules, if you don’t have battery capability in the UK, then those car manufacturers will move to mainland Europe,” he said.

The former Aston Martin chief executive added: “We have known about the rules for four years. There have been numerous warnings to the government. We have been sleeping at the wheel – [the] consequence is we are now running out of time and the UK becomes a much less attractive place in which to do business.”

Was Brexit not an issue before this?

Yes: the car industry was one of the most vocal critics of Brexit, warning in 2020 that it would cost the sector £55bn and add £1,900 to the average cost of a car imported from the EU.
So what is different now?

The drive to electrify motoring. In its submission, Stellantis says there will “not be sufficient battery production supplies in the UK or in Europe by 2025 and 2030 despite the fact this is key to meet the TCA under the current rules of origin”.

Many companies – including Stellantis – are racing to build “gigafactories” for car batteries in the EU, while one major project is under way in the UK in Sunderland. However, most of those will not be ready for 2024, meaning carmakers across Europe will continue to be reliant on imports from the dominant Asian battery makers.

In other words, there is a problem for the auto industry across Europe because there will not be a level playing field as agreed in the TCA. “If we are unable to rely on sufficient UK or European batteries, we will be at a major disadvantage. In particular against Asian imports, specifically South Korea, Japan and also China,” the carmaker says.

The carmaker’s announcement in 2021 that it would invest £100m to build electric vehicles at Ellesmere Port and was committed to continuing at its Luton site was lauded as a major vote of confidence in the UK post-Brexit.

However, since then the price of raw materials has soared – particularly those used in electric car batteries – amid the energy crisis after Russia’s invasion of Ukraine. The Vauxhall maker says these increased costs and other “external headwinds” mean it can no longer afford the planned UK and EU production minimums.

The following story has been in the news recently, and it comes as no
surprise to realise the the TCA is also being complained about by EU car
manufacturers, the deal being the same for both sides.

It’s a indication of how far the EU was willing to damage itself in order
to damage the UK, but reality from German car makers is causing a rethink
in Brussels.

Well, they did say that if we left, they would hurt us, but didn’t seem to
realise they were shooting themselves in the foot at the same time.

Thank goodness we’re free of them.

swldx...@gmail.com <swldxer1958@gmail.com> wrote:
> Three of the world’s largest carmakers have told the British government
> it needs to renegotiate its Brexit deal with the EU to change rules they
> say threaten UK electric vehicle production.
>
> The Vauxhall maker, Stellantis, has warned it will be unable to keep its
> commitment to make electric vehicles in Britain without the changes,
> while Ford has called them a “pointless cost”. Jaguar Land Rover, the
> biggest UK automotive employer, also said the timing of new rules was “unrealistic”.
>
> The trade and cooperation agreement (TCA) between London and Brussels was
> signed in 2020, so why is it suddenly an issue?
> What is the problem?
>
> Stellantis, which also owns the Citroën, Peugeot and Fiat, DS, Jeep, Alfa
> Romeo, Maserati and Abarth brands, says it is struggling to meet the
> TCA’s “rules of origin” that require 40% of an electric vehicle’s parts
> by value to originate in the UK or EU in order for it to qualify for trade without tariffs.
>
> This threshold is due to rise to 45% next year and then in 2027 it will
> increase to 55% and the battery pack will have to come from the UK or EU.
>
> Carmakers who do not comply face paying tariffs of 10% when they come to
> sell their finished vehicles on the other side of the Channel, making it
> harder for them to compete with cheaper rival models from east Asia.
>
> Stellantis, which employs more than 5,000 people in the UK, including
> 1,000 at its electric van factory in Ellesmere Port, Cheshire, and 1,200
> at its Luton plant, says these requirements make production in the UK
> unviable, and it is calling on the government to strike a fresh agreement
> with the EU to maintain existing rules until 2027.
>
> Ford, which has invested £380m growing its e-motor capacity at its plant
> in Halewood, Merseyside, also issued a statement on Wednesday calling for
> the three-year delay to the rule change while the UK and EU improve their
> battery production capacity.
>
> Stellantis says it will have no choice but to wind down operations,
> putting thousands of jobs at risk. “If the cost of EV manufacturing in
> the UK becomes uncompetitive and unsustainable, operations will close,”
> it argues in its submission to a House of Commons inquiry into electric car production.
>
> “Manufacturers will not continue to invest and relocate manufacturing
> operations outside the UK. The closing of UK manufacturing will see
> significant job losses, the loss of a skilled workforce and a negative
> impact to the UK economy.”
>
> David Bailey, a professor of business economics at the Birmingham
> business school, calls the problem an “existential threat to the UK car
> industry”, telling BBC Radio 4’s Today programme that the rules in the
> current Brexit agreement “put the UK at a competitive disadvantage”.
>
> Andy Palmer, the chair of the European battery manufacturer InoBat, told
> the same programme that 800,000 jobs in the UK associated with the car
> industry were under threat. “If you can’t meet these local content rules,
> if you don’t have battery capability in the UK, then those car
> manufacturers will move to mainland Europe,” he said.
>
> The former Aston Martin chief executive added: “We have known about the
> rules for four years. There have been numerous warnings to the
> government. We have been sleeping at the wheel – [the] consequence is we
> are now running out of time and the UK becomes a much less attractive
> place in which to do business.”
>
> Was Brexit not an issue before this?
>
> Yes: the car industry was one of the most vocal critics of Brexit,
> warning in 2020 that it would cost the sector £55bn and add £1,900 to the
> average cost of a car imported from the EU.
> So what is different now?
>
> The drive to electrify motoring. In its submission, Stellantis says there
> will “not be sufficient battery production supplies in the UK or in
> Europe by 2025 and 2030 despite the fact this is key to meet the TCA
> under the current rules of origin”.
>
> Many companies – including Stellantis – are racing to build
> “gigafactories” for car batteries in the EU, while one major project is
> under way in the UK in Sunderland. However, most of those will not be
> ready for 2024, meaning carmakers across Europe will continue to be
> reliant on imports from the dominant Asian battery makers.
>
> In other words, there is a problem for the auto industry across Europe
> because there will not be a level playing field as agreed in the TCA. “If
> we are unable to rely on sufficient UK or European batteries, we will be
> at a major disadvantage. In particular against Asian imports,
> specifically South Korea, Japan and also China,” the carmaker says.
>
> The carmaker’s announcement in 2021 that it would invest £100m to build
> electric vehicles at Ellesmere Port and was committed to continuing at
> its Luton site was lauded as a major vote of confidence in the UK post-Brexit.
>
> However, since then the price of raw materials has soared – particularly
> those used in electric car batteries – amid the energy crisis after
> Russia’s invasion of Ukraine. The Vauxhall maker says these increased
> costs and other “external headwinds” mean it can no longer afford the
> planned UK and EU production minimums.
>
>
>

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Spike

The flag waving Brexitters hailed Virgin Orbit as the dawn of a brave new UK space programme, just before its first and only mission ended in total failure in January this year, at a wet runway in Cornwall. Now it has been wound up. ☺️

https://www.dailymail.co.uk/sciencetech/article-12120785/Richard-Branson-shutting-Virgin-Orbit-selling-assets-worth-36-million.html

swldx...@gmail.com <swldxer1958@gmail.com> wrote:
> The flag waving Brexitters hailed Virgin Orbit as the dawn of a brave new
> UK space programme, just before its first and only mission ended in total
> failure in January this year, at a wet runway in Cornwall. Now it has been wound up. ☺️
>
> https://www.dailymail.co.uk/sciencetech/article-12120785/Richard-Branson-shutting-Virgin-Orbit-selling-assets-worth-36-million.html

Is there a point you are trying to make?

--
Spike