The European Union has been in the process of passing legislation aimed at reducing greenhouse gas emissions for years, with most of its focus going toward automobiles in that regard. In the UK, however, that country’s decision to exit the EU – often referred to as Brexit – is complicating matters for automakers like Ford, which aims to electrify its entire European passenger vehicle lineup by 2030 or sooner and is investing heavily in converting facilities like the Halewood plant to build power units for EVs. Recently, FoMoCo asked that trade requirements on rules of origin for EVs set to take effect in 2024 be delayed to 2027 over tariff concerns, and now, Tim Slatter – chairman of Ford of Europe – is suggesting that the UK should follow EU regulations as well, according to BBC.
“It’s really important that we maintain really good alignment to the European [regulatory environment] because that’s where we build and sell most of our vehicles,” Slatter said. “Otherwise, what we’re going to see is a lot of extra cost come into the cost of developing vehicles and producing vehicles and that can’t be a good thing for customers.”
The UK/EU Trade and Cooperation Agreement (TCA) – which governs trade between the UK and the EU – is due to be reviewed in 2025-2026, but essentially, the UK faces a couple of choices. It can choose to diverge from EU regulations, but if it does so, it will face restricted access to that market. However, if the UK does opt to follow those regulations, automakers will be able to export vehicles into the EU with no quotas or tariffs. In January 2024, the aforementioned 10 percent rules of origin tariff is set to kick in, which is precisely what automakers like Ford are trying to prevent.
“The trade and cooperation agreement remains the critical thing – frictionless trade, tariff free trade. It’s very important that Great Britain maintains good regulatory alignment with the European Union,” Slatter added. “There are sort of three big regulatory environments for automotive in the world. There’s the North American one, the European one, and the Japanese one. And it’s really important that we maintain really good alignment to the to the European one, because that’s where we build and sell most of our vehicles.”