Sunak Says UK Talking to EU on Post-Brexit Rules for Carmakers

(Bloomberg) — Rishi Sunak said his UK government is in talks with the European Union about Brexit-related rules that have triggered warnings from carmakers about the impact of looming tariffs on their profitability.

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“It’s something that car manufacturers across Europe, not just in the UK, have raised as a concern,” Sunak told broadcasters Thursday in Japan, where the British prime minister is attending the Group of Seven summit. “We are engaged in a dialog with the EU about how we might address those concerns when it comes to auto manufacturing more generally.”

Read More: UK Lobbies for Laxer Brexit Rules as Carmakers Seek Help

Sunak’s comments come after Stellantis NV, the Vauxhall maker which is retooling its Ellesmere Port site in northern England to make electric vans, said it’s unable to meet requirements on local content because of rising raw-material prices and a lack of domestic battery supplies.

The warning relates to a rule that 45% of an electric vehicle’s value must be sourced in Britain or Europe from 2024 to avoid export tariffs of 10% — a burden for UK automakers selling cars abroad. Sunak’s government has been urging the EU to push back the cliff-edge on the so-called rules of origin.

Read More: UK to Unveil Battery Plant Strategy in Bid to Retain Carmakers

In a written submission to Parliament, Stellantis said the origin requirements should be pushed back by three years. Japan’s Nissan Motor Co. also said assembling cars in Britain is at risk of becoming too expensive. Sunak met executives from Nissan and other Japanese companies on Thursday.

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