EU-UK Rules of Origin for EV batteries

Country / jurisdiction: United Kingdom · Year: 2021 · Status: In force · Level: Regional · Type: Voluntary

The Rules of Origin for electric vehicle (EV) batteries are critical in determining the eligibility of EVs and their batteries for preferential tariff treatment under various trade agreements. These rules are designed to encourage investment in domestic battery manufacturing and ensure that a significant portion of the value of EVs and their batteries comes from within the trading regions.

Under the EU-UK Trade and Cooperation Agreement , transitional rules of origin have been established for EVs and their batteries. To qualify for zero tariffs, a specific percentage of the value of EV battery packs or cells must originate in either the EU or the UK. These thresholds are set to increase progressively until 2027.

Initial Phase (May 2021 - December 2023) : The required content was set at 40% for vehicles, 30% for battery packs, and 30% for battery cells.

Second Phase (January 2024 - December 2026) : These percentages will increase to 45% for vehicles, 60% for battery packs, and 50% for battery cells.

Final Phase (From January 2027 onwards) : The thresholds will further rise to 55% for vehicles, 70% for battery packs, and 65% for battery cells.

In response to disruptions caused by the COVID-19 pandemic and other global events, the UK and EU have agreed to extend the current rules until the end of 2026. This extension aims to provide stability and avoid additional costs for manufacturers and consumers.

These rules are part of broader efforts to promote sustainability, reduce dependency on imported minerals, and support local industries in the transition to a low-carbon economy.

Official source: https://www.europarl.europa.eu/doceo/document/TA-9-2023-0436_EN.html