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In the global race for subsidies, British carmakers are in complete limbo

A cloud of uncertainty seemed to weigh on the atmosphere at the UK motor industry’s main conference dedicated to the electric transition, which took place on Monday 18 September in London. Between the US and China, which are massively subsidizing, and the European Union (EU) preparing a response and considering imposing tariffs on Chinese imports, UK-based manufacturers are facing major difficulties.

“China has decided to be at the forefront of vehicle electrification with a very proactive policy that the United States is following with the Inflation Reduction Act. [qui subventionne les véhicules électriques]. Do we just want to follow? » James Widmer, director of electric motor manufacturer Advanced Electric Machines, worries.

Of course, in 2023, several investments have been announced in favor of electric transmission. BMW is to invest £600m (€696m) in Oxford to produce the electric Mini, reversing its original decision to build everything in China. Nissan is developing a gigafactory in Sunderland, northeast England, with Chinese company AESC.


In turn, Tata is investing 4 billion pounds in another gigafactory. But it’s not enough”Mike Howes, director of the Society of Motor Manufacturers and Traders (SMMT), the sector’s representative body, warns. “We are waiting for an industrial strategy from the British government”, he declares. Especially since some serious problems require an urgent solution.

The first is a direct consequence of Brexit. London and Brussels are currently negotiating new battery trade rules. If they can’t agree, a 10% tax on electric cars will be imposed.

A Brexit deal at the end of 2020 made it possible for car sales between the EU and the UK to be exempt from customs duties, but with the condition that at least 40% of spare parts must be produced locally. From 2024, these rules will be tightened and will increase to 45% and especially to 60% for batteries. However, the vast majority of manufacturers do not respect this level.

The automotive industry wants to be confident. In the absence of a deal, duties will be imposed on cars manufactured in the UK and exported to the EU (750,000 cars in 2022), as well as cars manufactured in the EU and imported into the UK (1.3 million). cars in 2022). European manufacturers are also trying to reach an agreement. “Anything that makes cars more expensive is worrying”stressed Alex Smith, the boss of Volkswagen in the United Kingdom, which has a 20% market share in this country.

Source: Le Monde



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