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Ford calls for extension of post-Brexit trade rules until 2027

Ford is calling for an extension of post-Brexit trade rules until 2027 to avoid disruption to electric vehicle (EV) disruption.

The Blue Oval has invested £1.6 billion at its passenger car factory in Cologne, Germany and a further £380 million at its e-motor production site in Halewood, Merseyside.

New rules from next year will mean 45% of the value of an EV being sold in the EU has to originate from the UK or the EU to avoid a 10% tarriff.

However, UK and EU vehicle manufacturers are currently sourcing a lot of their EV batteries from Asia and this can account for a large proportion of the cost of producing an EV. It would mean UK and EU manufacturers would likely attract these 10% as they can’t ramp up battery production quickly enough.

Tim Slatter, Ford Britain chair, said: “Today the industry does not have sufficient supply of locally-sourced batteries and components to meet demand.

“Tightening the trade rules at this point risks undermining the switch to EVs with tariffs and adding pointless cost to customers wanting to go green.

“Manufacturers who have invested heavily early in the transition will be hardest hit by tariffs because combustion engine vehicles will continue to move tariff-free.”

Slatter said Ford has supported the Government’s zero emission vehicle (ZEV) mandate, that will prescribe the proportion of EV car and van sales from 2024.

However, he said introducing EV tariffs at the same time will undermine the ZEV mandate and slow EV sales.

He said: “Ford is calling for current trade requirements to be extended to 2027, to allow time for the battery supply chain to develop in Europe and to meet EV demand.

“Tariffs will hit both UK- and EU-based manufacturers, so it is vital that the UK and EU come to the table to agree on a solution.”

Ford’s statement now joins Stellantis and Jaguar Land Rover on calls for a rethink on post-Brexit trade rules.

In a statement to i, a Jaguar Land Rover spokeperson said the timing of the trade changes are “unrealistic and counter productive” and JLR is also calling on the UK and EU act quickly to agree on a better solution”.

Prime Minister Rishi Sunak confirmed to reporters while in Japan that the UK is engaging in dialogue with the EU about how to address concerns around the trade rules.

He said: “Car manufacturers across Europe, not just in the UK, have raised concerns.

“And as a result of that we are engaged in a dialogue with the EU about how we might address those concerns when it comes to auto manufacturing more generally.”

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