EU set to postpone 10% EV tariff on UK-built cars
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Damaging 10% levy due in January could be put on hold as Europe and UK look to fight back against Chinese brands
MA
Matt Allan
12 November 2026, 11:38 GMT · 3 min read
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European leaders are considering postponing a 10% tariff on electric vehicles built in Britain, according to a report.
The Financial Times claims that politicians in Brussels are consulting on delaying the levy in an effort to protect Europe’s auto industry from Chinese rivals.
The FT cited “several people close to the matter” and reported that the UK backed the plan.
Under post-Brexit rules of origin, from 1 January 2027, EVs exported from the UK to Europe will be subject to the 10% tariff unless at least 55% of their value originates in the UK or EU. Additionally, 70% of a vehicle’s entire battery must be from one side or other, and 65% of battery cells.
In June, the UK’s Society of Motor Manufacturers and Traders (SMMT) warned that the current Made in Europe stipulations would cost EV makers £1.4 billion in tariffs and, if implemented, the levy would damage both the UK and European car industries.
The rules of origin were developed to protect Europe’s auto industry from the growing threat of Chinese-made EVs. However, it is now feared that they could make Chinese models even more attractive in the UK, while British-built cars will become less competitive in Europe.
In September, the European Automobile Manufacturers Association (ACEA) warned that Europe’s battery manufacturing industry was not sufficiently developed to meet the requirements and 82% of the 520,000 EVs expected to be sold in 2027 would be subject to the levy.
According to the FT, sources close to the matter said that changes will be considered after a joint summit on 20 November. A compromise could include a one- or two-year deal that allows the offsetting of non-compliant exported vehicles against compliant domestic sales.
The UK and EU are each other’s biggest export markets, and earlier this month, a report from LSE Consulting called for joint action to protect the co-dependent industries from global competition. It said that cooperation and the inclusion of the UK in “Made in Europe” policies was in both parties’ interests.
Responding to the LSE report, Sigrid de Vries, ACEA director general, said: “The close ties between the EU and UK automotive industries are a strength we cannot afford to undermine.
“Both sides have a shared interest in building on this relationship to create the right conditions for investment, innovation and manufacturing. Closer cooperation and pragmatic policy choices will be key to ensuring Europe excels as a competitive place to build and sell vehicles.”
Mike Hawes, SMMT Chief Executive, added: “The UK and EU are bound by €80 billion in annual automotive trade and millions of jobs. At a time of intense global competition, this report makes clear the need for both sides to collaborate and remove barriers to trade.
“Our collective response must strengthen both sectors, with the UK included in ‘Made in Europe’ measures, a pragmatic solution to 2027 rules of origin, and stronger integrated supply chains.”