The European Commission has called for a one-off extension to the current rules on electric vehicles and batteries covered in the EU’s post-Brexit trade deal with Britain.

New rules of origin had been due to kick in from the start of next year, and could have led to tariffs on exports of EU vehicles to Britain, and vice versa.

The commission has now proposed a three-year extension of the current system until 31 December 2026. It is also proposing a clause that would render it legally impossible for the two sides to introduce a further extension.

The proposal will now go to EU leaders for approval.

‘Unforeseen circumstances’

The rules of origin for electric vehicles and batteries under the Trade and Cooperation Agreement were designed in 2020 to incentivise investment in the EU's battery manufacturing capacity.

“Circumstances not foreseen in 2020 – including Russia's aggression against Ukraine, COVID-19's impact on supply chains, and increased competition from new international subsidy-support schemes – have led to a situation where the scaling-up of the European battery eco-system has been slower than initially anticipated,” the commission said.

It added that its proposal for an extension had been made against this backdrop, and in the light of concerns raised by the European automotive, battery, and chemical industries.

EU industries have expressed concerns that their electric-vehicle exports to Britain will not comply with the incoming rules, leading to tariffs imposed on those exports, followed by the loss of their competitiveness in the British market.

Commissioner Maroš Šefčovič described the move as “a balanced solution that protects the EU’s interests”.