Car industry pleads for delay to post-Brexit tariffs on EVs
- Reference: 1695645009
- News link: https://www.theregister.co.uk/2023/09/25/car_industry_brexit_tariff/
- Source link:
The tariff, due to come into force on January 1, was part of the EU-UK Trade and Cooperation Agreement that allowed the UK's departure from the trading bloc.
The thinking at the time of the agreement in 2020 was that the ensuing three years would be plenty of time for the European car industry to make great leaps in electric vehicle manufacture.
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Top minds in London and Brussels negotiating the deal agreed to [2]"rules of origin" dictating that a 10 percent tariff would apply to any vehicle that was less than 45 percent made in either the EU or across the Channel.
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This overconfidence has failed to materialize, however, with carmakers finding themselves still hopelessly reliant on components from China and elsewhere to meet demand.
Nowhere is this more keenly felt than battery production. After Britishvolt's [5]collapse in January , the UK has almost none to speak of, save for Nissan's plant in Sunderland. EV battery specialist Envision is building a Gigafactory in the area, but it won't come online until 2025.
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Likewise, Germany's AMG Lithium is about to start production of lithium hydroxide, which is used in batteries for electric vehicles, but has orders to fulfill stretching into 2026.
At this point it may never be possible for Europe to catch up to China where the production of rare earth materials is concerned. "We know this is an area where we rely on one single supplier – China – for 98 percent of our rare earth supply, 93 percent of our magnesium and 97 percent of our lithium – just to name a few," European Commission President Ursula von der Leyen [7]said in March .
The result of the tariff, [8]according to the European Automobile Manufacturers' Association (ACEA), would be a cost to EU manufacturers of €4.3 billion over the next three years and a possible reduction in vehicle production by 480,000 units.
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"Driving up consumer prices of European electric vehicles, at the very time when we need to fight for market share in the face of fierce international competition, is not the right move – neither from a business nor an environmental perspective," said Luca de Meo, ACEA president and CEO of Renault Group. "We will effectively be handing a chunk of the market to global manufacturers."
[10]Ford, BMW, Honda to steer bidirectional EV charging standard
[11]Power grids tremble as electric vehicle growth set to accelerate 19% next year
[12]Nikola recalls electric truck fleet over battery fires
[13]Tesla steering problems attract regulator eyes for second time this year
He added: "Europe should be supporting its industry in the net-zero transition as other regions do – not hindering it. There is a very simple and straightforward solution: extend the current phase-in period for battery rules by three years. We urge the Commission to do the right thing."
But noises out of the European Commission aren't encouraging. Speaking to [14]The Guardian , European Commissioner for Internal Market Thierry Breton said: "If something has been negotiated, it shouldn't be changed.
"Remember the automotive industry is not made only of the manufacturers but is made also of the hundreds of thousands of companies providing everything which is needed for a car, including the battery providers.
"It is a global supply chain. I call it the ecosystem, and I have to look at, as commissioner of industry, not at one single part of this ecosystem but all of the ecosystem.
"What has been negotiated has been negotiated and I think it's very important to stick to a treaty when it has been so difficult to do it. And when we speak about the automotive system, everyone who is part of this ecosystem I have to take care of, not one single category."
Stellantis, which owns Chrysler and Peugeot, may be one victim sacrificed on the altar of the EU's battery industry. Earlier this year, it told a UK government inquiry: "If the cost of EV manufacturing in the UK becomes uncompetitive and unsustainable, operations will close."
Europe is well aware that China has it in the palm of its hand, but these actions only delay the inevitable. In the meantime, normal folk will find EVs even further out of their price range. ®
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[1] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZRGuo5PZeYJz4aBYk90PnwAAAFg&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[2] https://www.theregister.com/2023/07/07/postbrexit_tariffs_on_electrical_vehicle/
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZRGuo5PZeYJz4aBYk90PnwAAAFg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZRGuo5PZeYJz4aBYk90PnwAAAFg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://www.theregister.com/2023/01/18/electric_vehicle_batteries_could_help/
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZRGuo5PZeYJz4aBYk90PnwAAAFg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[7] https://ec.europa.eu/commission/presscorner/detail/en/speech_23_2063
[8] https://www.acea.auto/press-release/eu-uk-battery-rules-act-now-and-do-the-right-thing-eu-auto-chief-urges-commission/
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offbeat/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZRGuo5PZeYJz4aBYk90PnwAAAFg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[10] https://www.theregister.com/2023/09/13/ford_bmw_honda_partner_to/
[11] https://www.theregister.com/2023/09/08/ev_growth_gartner/
[12] https://www.theregister.com/2023/08/15/nikola_recalls_its_electric_truck/
[13] https://www.theregister.com/2023/08/02/tesla_steering_problems/
[14] https://www.theguardian.com/business/2023/sep/22/we-cant-alter-brexit-deal-to-appease-car-industry-says-european-commissioner
[15] https://whitepapers.theregister.com/
. . . and armed with baseball bats.
"We need an organisation with the equivalent clout of the OBR to reign in uninformed science and engineering decisions by ministers"
I can't agree more with the sentiment of having political decisions driven more by science and engineering. But government ministers are already well advised in that respect. There is a fairly large cohort of scientific advisors to government across many disciplines, all ultimately responsible to Dame Angela MacLean, the current UK government Chief Scientific Advisor. The problem as I see it is getting ministers to act more on that advice rather than paying to the church of economics and the media.
Perhaps an organisation like the OBR would good, to have the clout to publicly call out politicians when they cherry pick the scientific advice they are given, simply to support their already entrenched position.
Not too much point building EVs if they can't put an adequate public charging infrastructure in place. But don't worry. HMG has assured us building EVs is one of the many things for which the UK is the best place in the world.
Astounding
>It has absolutely astounded me that the UK government didn't manage to incentivise a huge amount of battery manufacturing facilities to be set up in the UK.
I'm not sure why, as it has not astounded me at all.
Except that it is no use if there is nobody to use the batteries.
Anyone can go through the motions to setup a factory, it is just the outcome is likely to be a failure.
As we have seen, once a reputable manufacturer comes up with a proposal it is supported.
"Instead, we have muppets in government *still* saying that the future might be hydrogen, due to having large envelopes full of cash campaign contributions from the fossil fuel industry "
FTFY
"Top minds"
Ha ha ha!
I'll be sticking with petrol (or diesel) for my next car.
Why would I want to spend all that extra money, and then have a vehicle which will lose value faster because the batteries conk out. (and will have greater carbon emissions if you include manufacturing for the first 80,000 miles or so)
I'll be sticking with my 2015 Diesel Kia for the foreseeable, but I can't imagine it will last past 2035 by which time I'll be looking for a petrol or diesel, unless there are very significant subsidies.
Not really got anything against electric, it would probably serve my needs but I just don't want to spaff that much extra money to move the emissions from my tail pipe to a gas fired power station. IF they have built a load of nuclear by then, it might be different.
Re: I'll be sticking with petrol (or diesel) for my next car.
There are a couple of standard pieces of anti-EV FUD in there.
The first is "batteries conk out." EV batteries are modular and, if a battery module fails, it can be replaced for hundreds rather than thousands. Compare your fossil-powered engine, where the failure of a piston ring will necessitate lots of labour to rebuild the engine, or a complete new engine for a similar price to a complete new EV battery pack.
The failure mode that is happening with EV batteries is wear: which means their capacity and so range reduces. So your EV which previously did 200 miles now only does 190 miles (about what has happened to mine after 50,000 miles and 5 years of driving.) But even when it has been driven 100s of 1000s of miles and is reduced to 100 miles range, it is still useful to someone. When your diesel Kia has a worn-out engine it will be scrap value.
The second piece of FUD is "move the emissions from my tail pipe to a gas fired power station." Firstly the gas-fired power station extracts far more work from a given amount of fuel than your car ever will, because there are no requirements for a power-to-weight ratio in a fixed power station. Secondly the emissions that are giving little Timmy next door his asthma attacks are best moved to the power station, where scrubbers can remove the nitrogen oxides from the exhaust in a way your car never can -- that power-to-weight ratio again.
But the last point is the big one. If you buy a brand new diesel car, it will spend the next few decades being powered by diesel. If you buy a brand new EV the fuel used will change according to the fuel mix used for the grid. So, even if it is fossil-powered today, who is to say it will still be fossil-powered in 20 years?
There are real problems with widespread EV adoption -- lack of affordable overnight charging is the biggest one -- but most of what you've read about EVs is FUD. Check it first!
Re: I'll be sticking with petrol (or diesel) for my next car.
Efficiency of a petrol engine - around 40%
Efficiency of a combined cycle gas power station - around 50%
National grid efficiency from powerstation to plug - around 92%
Efficiency of an electric car from plug to wheel - around 90%
Multiply those together and you get 41.4%, or basically it is the same. Gas emits less carbon than petrol. Other energy sources emit less carbon than gas, except for coal which mostly isn't used any more.
So the benefits are from using better fuel sources, not the fact that it is electric.
Re: I'll be sticking with petrol (or diesel) for my next car.
Do you have a source for that efficiency of a petrol engine?
Consider this: burning a litre of petrol gives about 9.5kWh of thermal energy -- source https://www.engineeringtoolbox.com/fuels-higher-calorific-values-d_169.html
So my EV was built with a 40kWh battery that gives about 200 miles range: 5 miles per kWh. If your car can get 40% of the 9.5kWh out of a litre of petrol, and is not harder to push down the road than my EV, then it should get at least 19 miles per litre -- more if my EV is less than 100% efficient -- or 85 1/2 miles per gallon. Does it?
Re: I'll be sticking with petrol (or diesel) for my next car.
40% efficiency for petrol engine is wildly optimistic. That's Formula 1 efficiency including the heat recovery.
Typical road cars are maybe 25% efficiency for petrol and a bit over 30% for diesel.
There are a couple of notable advantages to electric cars, even if grid were 100% fossil fuel
- At least as efficient as ICE, probably more efficient
- Exhaust can be centrally scrubbed, and what can't be scrubbed is not being emitted directly in people's faces
And significant advantages to decarbonise the grid that go beyond climate change, most notably less dependence on states like Russia and Saudi Arabia that I would not consider dependable
Re: I'll be sticking with petrol (or diesel) for my next car.
I call bullshit.
There's no way in heaven or earth you are going to get a replacement battery for hundreds. It might be fine at 50,000 miles, but it WILL conk out very badly before 100,000. My Diesel will probably be good for 250,000. At least my engine will have some scrap value. I'll have to pay to get rid of that dud battery.
I'm sorry but these scrubbers to remove the nitrogen oxides? Are they real, or just a wet dream from the Green Party? Wishful thinking? Also, hauling fossil fuels around is actually quite efficient. They pack an awful lot of power.
When that fuel mix changes, it changes the equation a bit (if you're environmentally minded) and so it changes things somewhat... for those of us that can afford it.
Re: I'll be sticking with petrol (or diesel) for my next car.
The point is that a module failure is not a replacement battery. It is a replacement module. The battery on my EV is 96 modules. The overall battery costs about 8000 euros, so an individual module ought to cost 80. In real life, motor parts don't work like that, but it's certainnly not thousands.
The overall battery doesn't fail, it fades away. The range goes down. If my car has 75% of the range at 100,000 miles, that is not "conked out," it's just less range. If it has 25% of the range at 500,000 miles, that will also not be "conked out," either. And, if your local battery recycler won't pay you for the battery, find another one. Lithium is valuable and is going to get more valuable as time goes by. You don't pay to have lead-acid batteries taken away, do you?
I am not sure exactly of your anti-pollution measures in your power stations, but it's a lot easier to fit a scrubber to a power station than to a Kia diesel. But a quick Google talks about a 74% reduction in NOx emissions from Britain's energy sector: https://www.gov.uk/government/statistics/emissions-of-air-pollutants/emissions-of-air-pollutants-in-the-uk-nitrogen-oxides-nox
Re: I'll be sticking with petrol (or diesel) for my next car.
There are early Teslas out there with over 300,000 miles on the clock, and still counting. On the original battery & motors.
Re: I'll be sticking with petrol (or diesel) for my next car.
This is a false equivalence. Electric motors are indeed significantly simpler that internal combustion engines. Batteries, on the other hand, are considerably more complex than fuel tanks. What I personally hope to see is a shift from dead-end batteries to fuel cells that are both more efficient and energy dense than either alternative. By then we might even be producing hydrocarbons from renewable sources at competitive prices. Though I wouldn't count on this given how hard to industry is avoiding the issue and clamouring for subsidies for almost anything else.
Re: I'll be sticking with petrol (or diesel) for my next car.
Hydrogen is a non-starter for cars. That's why Shell have been closing their hydrogen filling stations around the world.
Re: I'll be sticking with petrol (or diesel) for my next car.
" I can't imagine it will last past 2035 by which time I'll be looking for a petrol or diesel, unless there are very significant subsidies."
Regardless of subsidies and tariffs, battery costs have been going down and battery longevity, power density and energy density have been going up slowly but steadily. By 2035 you will have another 10 years of research and manufacturing experience, it's highly likely that the cost of an electric car would be the same or less than a diesel equivalent. If you were buying a car now, maybe diesel is still more economical and reliable (or maybe not, depends on your circumstances). And either way, there are many other reasons to buy electric, any of which may or may not affect you. Bottom line, it's a mug's game thinking now of whether it's better diesel or electric in 2025, let alone 2035. These things can change very quickly
Re: I'll be sticking with petrol (or diesel) for my next car.
But there is still the charging issue.
It is no use have fast charging 10% to 80% in 15 or even 10 minutes because most people still park then whilst they do something else.
ICE refuelling is transient so turnover at the point of dispensing is quick.
This is not the case for electric so you need far more charging points. This now brings new issues.
Until charging times are on parity with refuelling, the ratio of chargers to users needs to be far higher.
Re: I'll be sticking with petrol (or diesel) for my next car.
Agreed. There should be cheap (=domestic night rate) AC charging everywhere cars are left overnight. That is the missing piece. Get onto your politicians, your local council, your landlord if you have one. That is the blocker for the EV adoption that the governments want.
Fast charging is not the answer: it wears the battery, it loads the grid at a time when it is already loaded, and the chargers are expensive. Overnight AC charging is the answer, and it needs to be ubiquitous if EVs are going to be widely adopted.
Re: I'll be sticking with petrol (or diesel) for my next car.
Will night time demand for electricity still be lower than daytime if everyone is charging their cars?
Re: I'll be sticking with petrol (or diesel) for my next car.
The way I look at it is this:
At my local Tesco, there are 16 petrol pumps, and 500 parking spaces.
There's generally a queue for the petrol station, but it doesn't take too long to get through.
4 of the parking spaces have chargers, and they are always fully occupied, so at the moment, 4 is clearly not enough.
Basically, all of the parking spaces in use would need to have chargers. People would park, plug their car into the charger, do their shopping, and hopefully come out to a fully charged car.
I'm not sure we actually need 500 parking spaces, but definitely we need 250, maybe 350 to allow for really busy shopping periods before Christmas.
So about 20 chargers for each pump.
Re: I'll be sticking with petrol (or diesel) for my next car.
I know of the Volvo study you got that 80,000 mile figure from, and it's been completely debunked.
An EV can repay its "manufacturing carbon debt" within around 16,000 miles.
Sorry, that didn’t grok. Why is the EU putting tariffs on cars leaving the EU and entering Britain?
Because they can!
Top minds in London and Brussels negotiating the deal agreed to "rules of origin" dictating that a 10 percent tariff would apply to any vehicle that was less than 45 percent made in either the EU or across the Channel.
Which then drills down into 'made in' vs 'assembled in' and as very little stuff is made in either the UK or EU, the 10% tariff applies. But kinda intended to incentivise 'green' UK to build EVs and components, and the EU doing the same to protect it's automotive industry. Overlooking that manufactures might just go 'screw this noise', build wherever it's cheapest and pass the 10% tariff onto consumers.
The battery thing is also a challeng, ie what battery, and for which vehicles? And then dives into the small print of whether a battery can be >45% 'Made in Britain' when we're not well known for our lithium production, or all the other raw materials that go into a battery.
But fear not! Our politicians are saving the planet!
The EU is putting a 10% tax on British cars entering the EU, and Britain is reciprocating. If the EU didn't do this, Britain wouldn't reciprocate.
The gift that keeps giving
The real issue is needing to untangle the sophisticated supply chains between the EU and the UK after Brexit. For many years now parts have gone to and fro before the final product emerges. This is no longer possible because the UK no longer wants to be part of a customs union. Hence, to prevent vehicles made elsewhere from entering the EU via the UK under preferential terms the tariff is applied.
Sacrifice all to the God
And even the European manufacturers can't have EU-manufactured batteries. And even if the factories are opened, the raw material supply chain is hopelessly compromised. So, the EU commission opts for Cuba-style automotive stagnation, instead of just moving the whole "thou shalt make only EVs" out by enough years.
Logic goes out of the window when religion is involved.
Re: Sacrifice all to the God
If you want to see a really compromised supply chain, take a look at where your fossil fuels come from.
The world has suffered decades of oil wars. Time for a change.
Re: Sacrifice all to the God
Oh we'll get change all right.
Coming soon - lithium wars...
Re: Sacrifice all to the God
Sure, but if a car is assembled in the EU using a chinese battery, the tax only applies to the battery, not the whole car. If that manufacturer then exports the car to Britain, the 10% tax applies to the entire car.
Nationalism or a Green Transition.
Pick one.
They did. Nationalism. Way, way, way more important than that hippy globalised climate change stuff. [You are supposed to wave your flag now and sing the national anthem.]
The Tories delayed phasing out ICE vehicles not just as a cheap vote grab, but because there won't be enough EVs in the continent of Europe for decades.
The UK government have already had to cough up half a billion quid to retain some sort of steel industry, and most of the car plants are only staying on with subsidies that would bring a nostalgic tear to the eye of a British Leyland exec. Nationalism isn't free, but I'm sure you are loving the Brexit-originated inflation, deep down. After all, the more you pay for something, the more you love it. So, lots of extra love in the UK now.
I'm confused....
So, if someone in an EU country builds an EV with a Chinese battery and sells it in another EU country: no harm, no foul.
If that EU EV is sold in a 3rd country that has an agreed FTA (you know who), the 3rd country has to slap a 10% tariff on it.
And vice versa.
And, if the EU EV has an EU battery, then the aforementioned 3rd country can't slap a 10% tariff on it.
And if the 3rd country with an FTA can't muster its own batteries then they still get lumbered with the 10% tariff when they try to flog the 3rd country EV in the EU.
So the people of the 3rd country will end up paying more for their EV than Johnny Foreigner and selling less of their home made EVs because of the EU FTA.
I ask myself, could this possibly be something to do with Brexit?
Lie
with carmakers finding themselves still hopelessly reliant on components from China and elsewhere to meet demand.
Now that's a lie. Components from China are much cheaper, which means companies can maintain much higher profit margins. It has nothing to do with "meeting demand", just greed.
It has absolutely astounded me that the UK government didn't manage to incentivise a huge amount of battery manufacturing facilities to be set up in the UK. Instead, we have muppets in government *still* saying that the future might be hydrogen, due to having no science or engineering background to give them understanding of why that's not a particularly good idea, regardless of where the hydrogen is sourced from.
We need an organisation with the equivalent clout of the OBR to reign in uninformed science and engineering decisions by ministers.