EU backs down on planned post-Brexit electric car sales tariffs in boost for UK car makers that will save buyers thousands of pounds

The European Union has cleared the looming post-Brexit cliff edge in electric vehicle (EV) trade – a huge boost for British carmakers and a move that will prevent the cost of battery-powered models from spiraling in just a matter of days.

Brussels today proposed a three-year deferment of the 10 percent “rule of origin” tariffs that were due to come into force in January.

Business Minister Kemi Badenoch has repeatedly called on EU officials to extend the deadline.

Car makers have warned the tariffs will add an average extra £3,400 to the cost of an electric car and cause more than £4 billion in damage to the industry on both sides of the Channel. But as recently as last month, former EU Brexit negotiator Michel Barnier warned there would be “no flexibility” on the issue.

Former EU Brexit negotiator Michel Barnier (pictured) warned there would be ‘no flexibility’

Carmakers have warned that this will increase the cost of an electric car by an average of £3,400.

Under complex new “rules of origin” due to come into force next year, the cost of parts of each car that must be made in the UK or EU to avoid tariffs would rise by up to 45 per cent from 1 January.

However, with batteries making up between 30 and 40 per cent of a car’s cost, the use of powertrains from outside the UK and Europe is effectively ruled out.

But many batteries have to be imported from Asia, while the UK and Europe are increasing their battery production capacity.

France has long ignored pleas from its industry to agree to a delay and has been the main obstacle to an agreement, but last month signaled for the first time that it was willing to listen.

The European Commission is expected to formally unveil the three-year deferment plan today following a briefing by diplomats.

However, it must be approved by the 27 member states of the European Council.

Ms Badenoch is calling on EU officials, the guardians of the bloc’s single market, to see sense and agree to a delay because the new rules were set to hit German carmakers harder than British ones.

One EU diplomat said: “This is another sign that the EU-UK relationship has reached a point where long-term mutual benefits trump short-sighted political pandering.”

It comes after Rishi Sunak was forced to rely on the Labor Party to pass controversial EV sales quota legislation following another backbencher rebellion.

A total of 28 Conservative MPs defied the Prime Minister late on Monday by voting against legislation that would require 80 per cent of car sales to be electric by 2030.