The Society of Motor Manufacturers and Traders (SMMT) has said that a ‘no-deal Brexit’ would trigger a £2,800 uplift in electric vehicle (EV) prices and jeopardise the growing interest in green new cars.
It said that newly-compiled calculations suggest the impact of World Trade Organisation (WTO) tariffs on EU-built EV would effectively cancel out UK’s plug-in car grant and risks reducing increased BEV demand next year by at least 20%.
Tariffs would also add £2,000 to cost of British-built battery electric cars sold in Europe, the SMMT said, damaging international competitiveness as UK strives to become a global leader in electromobility.
SMMT chief executive Mike Hawes said: “Just as the automotive industry is accelerating the introduction of the latest electrified vehicles, it faces the double whammy of a coronavirus second wave and the possibility of leaving the EU without a deal.
“As these figures show, ‘no deal’ tariffs will put the brakes on the UK’s green recovery, hampering progress towards net zero and threatening the future of the UK industry.
“To secure a truly sustainable future, we need our government to underpin industry’s investment in electric vehicle technology by pursuing an ambitious trade deal that is free from tariffs, recognises the importance of batteries in future vehicle production and ensures consumers have choice in accessing the latest zero emission models.
“We urge all parties to re-engage in talks and reach agreement without delay.”
The SMMT Said that a ‘no deal’ would be the worst possible outcome for UK Automotive, the 10% WTO tariff adding at least £4.5bn to the annual cost of fully assembled cars traded between the UK and the EU, with an average hike of £1,900 per EU-built vehicle sold in the UK.
Its new analysis showed that the impact could be greater sill, however, with £2,800 added to fully electric cars fitted with expensive battery technology.
A study completed by Castrol revealed a “tipping point” at which EVs would prove more attractive to potential customers, with a priced of £24,000, an average 30-minute charge time and range of 282 miles on potential buyers’ wish lists.
In a statement issued today (October 22), the SMMT said that WTO tariffs would “hold back the evolution of the electric car from a niche technology to one with mass affordability”.
It added: “UK car buyers are currently on track to register some 78,000 BEVs this year, with further growth expected in 2021.
“However, SMMT estimates that the price shock caused by these tariff increases could reduce the increased demand for BEVs next year by at least 20%, even before the impact of potential, border delays, supply chain disruption and currency fluctuations are taken into account, hindering efforts to accelerate uptake and decarbonisation.”
SMMT analysis compiled with the help of Frost & Sullivan and published last month revealed that spending of at least £16.7bn was required to get the UK’s public charging network ready for mass EV market, with 507 new charge points needed every day to 2035 to drive buyer confidence.
Today’s statement also reiterated a need for the UK Government to boost its offer of incentives to EV buyers in a bid to boost their uptake.
EV buyers in Germany currently enjoy a purchase incentive of up to £8,160 while French consumers can obtain a £6,350 grant.