Thread by @faisalislam

NEW
UK push on tariff free electric/ hybrid car trade with non-European battery rejected in EU draft circulated with member states, obtained by BBC.

Essentially some UK car exports to EU will attract tariffs with or without deal from Jan, after rejection of 70% foreign parts ask

UK asked for a transition of vehicles with up to 70% non-European parts (essentially Japanese batteries/ hybrid systems) to be eligible... after specific asks from within UK car sector.

EU draft says 45% from January (ie majority UK & EU)... (same as petrol/diesel)

... EU draft goes further, from 2027, any electric or hybrid would have to have EU or UK battery, to be eligible for tariff free trade..

Clear strategic effort to prevent UK from being offshore assembly hub for Single market for cars with Chinese or SE Asian electric systems

Or American, for that matter, tho Musk already chose Berlin for Tesla gigafactory..

All this is a related but separate issue to my report last month about Frost’s letter to car industry. On foreign parts generally said “obviously cannot insist upon”... bbc.co.uk/news/business-…

This is about Product Specific Rules of Origin, complicated, not seen as priority in talks generally, cf fish or state aid - but absolutely vital for UK manufacturing.

In last months letter Frost said “neither been willing to discuss these nor to share any proposed text with us”

Well now we do have draft text from both sides EU & UK - that we have obtained - so the glass half full version of this story would note there is a discussion to be had, and I’m told that such discussions may even be being had today.... perhaps bodes well for deal...

But v little time, and this could be a test of what exactly when push comes to shove, UK negotiations choose to prioritise.

Also draft EU proposal went to member states & industry. EU motor industry was sympathetic to UK proposal - so now would be moment for “German carmakers”.

Problem is the Commission and member states are trying to chivvy the EU car industry to move even faster on electrification, and also related newer “self sufficiency” agenda of having domestic EV supply chain, not China/ SE Asia dependent. German carmakers might not be heard here

FULL story here:

bbc.co.uk/news/business-…