tomuk wrote: phased reduction in the allowable amount of foreign content (i.e. non EU or UK)
Well, the industry sees it as us having, once more, created a quillotine... for our own necks:
By Kira Taylor | EURACTIV.com
Jan 21, 2021 (updated: Jan 22, 2021)
The electric vehicle industry has four years to prepare for stricter quotas for non-EU parts [Paul Brennan / Pixabay]
Electric vehicles traded between the EU and the UK have been given a grace period to prevent trade being slammed with tariffs, but battery producers need to start preparing now to meet the deadline, industry sources say.
Under the new EU-UK trade agreement, a maximum of 45% of car parts are allowed to originate from outside the EU in order to benefit from zero-tariff trade between the two sides. Above that threshold, they will face tariffs.
However, because most batteries for electric vehicles come from outside Europe,
an annex to the deal grants a grace period for the industry to bring production within its borders.
Until 2023, electric vehicles require at least 40% of content originating from the EU or the UK while batteries require 30% to avoid tariffs. After that, until 2026, electric vehicles require 45% and batteries 50-60%.
“The phase-in addresses a big concern for the industry because to create a battery industry you really need to have scale and demand. The phase-in helps ensure trade can continue, but may not be long enough,” said Nils Poel from CLEPA, the European association of automotive suppliers.
While the industry expects production of electric vehicles, including batteries, to increase in Europe, it can take up to five years to plan and develop a battery plant.
Even EU-produced battery cells contain, at best, around 20-30% of EU originating content, so the 45% requirement would be challenging for electric vehicle producers.
“
That’s extremely restrictive. I’m not aware of any other rule in any agreement that goes quite as deep in the supply chain as that,” said Jonathan O’Riordon, international trade director at the European Automobile Manufacturers Association (ACEA)."
- the bolding added
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)