The boss of Mercedez-Benz has said there is “no logic” behind post-Brexit tariffs on European carmakers, echoing concerns in the sector that their looming imposition could hamstring the UK’s electric car ambitions.
Ola Kallenius, who has led the German carmaker since 2019, argued that both the European Union (EU) and the UK’s nascent battery industry was not ready for so-called “rules of origin” tariffs.
From next January, 45 per cent of the value of an electric car must originate from within the UK or EU in order for carmakers’ to qualify for tariff-free trade.
Failure to meet the standards will see a 10 per cent tax imposed on electric car exports from both Britain and Europe.
“I understand the intention — to promote local content in cars made in Europe and in the UK,” Kallenius told the Sunday Times.
“But the battery industry is not ready in the EU or Britain. So if we were to add 10 per cent tariffs in both directions now, it would hurt both sides. There’s no logic to that.”
Automakers have reacted to the arrangements furiously this year, calling for the UK government to renegotiate elements of the Brexit deal or face the closure of multiple British factories.
Kallenius argued that any new rules should be “postponed” until the battery sector is more prepared, in order to avoid damaging carmakers’ bottom lines.
Stellantis – the parent firm of Vauxhall, Citroen, Peugeot and Fiat – said in May it would be unable to keep its commitment to making electric vehicles in the UK without changes to the deal.
The recent announcement of JLR owner Tata Group’s £4bn Somerset gigafactory has eased some concerns but still leaves the UK well behind other countries’ on battery production – which is critical to the entire EV supply chain.
Speaking on Brexit as a whole, Kallenius said it was “an awful shame to see Britain not at the heart of the EU.”
“I love the UK. I love the culture — the pop culture, the love for football. Britain has so much to offer the world.”