A ‘no deal’ Brexit will increase the price of electric vehicles in the UK, warns the Society of Motor Manufacturers and Traders (SMMT).

The SMMT has warned that a no-deal Brexit would be the worst possible outcome for the UK’s automotive industry.

The UK and EU automotive industries are deeply integrated, with around two-thirds of all battery-electric cars on sale in the UK built in European factories.

According to the organisation, the immediate imposition of blanket tariffs under World Trade Organisation (WTO) rules would add billions to the cost of trade and, crucially, to the cost of building and buying electric vehicles.

Ubitricity Electric Avenue project lamppost charging (Image: Siemens)

The 10% no-deal WTO tariff would add at least £4.5bn to the annual cost of fully assembled cars traded between the UK and the EU, with an average increase of £1,900 per EU-built vehicle sold in the UK.

For electric vehicles the cost increase is even higher, at £2,800, effectively making the £3,000 plug-in car grant for these vehicles pointless.

The tariff would also add around £2,000 to the average cost of UK-built battery electric cars (BEV) exported to the EU, making the UK’s products less competitive and attractive.

The organisation has said this would further hamper the UK’s ambition to become a global leader in zero-emission vehicle development, production and deployment.

UK car buyers are expected to register 78,000 EVs this year, however, SMMT has estimated that the price shock caused by these tariff increases could reduce the increased demand next year by at least 20%.

Mike Hawes, SMMT Chief Executive, 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 a choice in accessing the latest zero-emission models. We urge all parties to re-engage in talks and reach an agreement without delay.’

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