European and British carmakers are again seeking a reprieve from a post-Brexit trade rule that could impose a 10% tariff on electric vehicles crossing the Channel from 1 January 2027.
The risk does not arise simply because a car is assembled in Britain. To remain tariff-free under the EU-UK Trade and Cooperation Agreement, an electric vehicle will need at least 55% EU or UK content by value.
Its battery pack must contain 70% originating content, while cells must reach 65%. Models that miss those thresholds could face the standard 10% import duty when entering the EU.
Postponed for three years
The requirements were originally due to take effect in 2024, but were postponed for three years because European battery production was not ready. That grace period ends on 31 December. Carmakers and suppliers argue that a second delay is needed, warning that European cell capacity and local supply chains have not developed quickly enough.
For Belgium, the issue could become visible in the showroom rather than at the border. The most exposed cars are UK-built battery-electric models sold on the continent. That includes Nissan’s new LEAF from Sunderland, Stellantis electric compact vans from Ellesmere Port, and JLR’s forthcoming Range Rover Electric and Range Rover Sport Electric from Solihull.
The latter two sit in a premium segment, but fleets and small businesses buying electric vans would have less room to absorb a higher acquisition cost.
MINI is not currently part of that group. Although BMW had planned to produce the electric Cooper and Aceman in Oxford from 2026, it postponed the project, leaving the current electric models sourced from China.
More than 10%
A 10% duty does not automatically translate into a 10% rise in the Belgian list price. It is levied on the car’s customs value, not the retail sticker, and manufacturers can choose to absorb part of the cost through lower margins, discounts, or sourcing changes.
But when the extra cost is passed through to a Belgian private buyer, it is also subject to 21% VAT. For example, a €3,000 duty passed on in full would add €3,630 to the consumer price, including VAT. The real impact will vary widely by model, battery sourcing, and commercial strategy.
Nissan may be better placed than some competitors. Its LEAF is built in Sunderland, alongside AESC battery production, a local setup designed to increase UK content.
Still, compliance is determined by the precise origin of cells, pack components, and other parts, not solely by the location of the final assembly plant. Stellantis and JLR face the same calculation across their supply chains.
The consequences could be uncomfortable in the Belgian market, where EV prices are already under pressure from intense competition, particularly from Chinese brands and lower-cost European offerings.
A brand that passes on the tariff risks makes a UK-built model less competitive against an EU-built alternative. A brand that absorbs it surrenders margin at a time when many manufacturers are already cutting costs.
For premium brands, the effect may be softened by pricing power. For volume vehicles and electric vans, it could affect leasing rates, fleet tenders, and the availability of specific models.
That is why the industry is pressing Brussels and London to find a solution before the year-end deadline. Without one, the 2027 rules would turn battery sourcing into a direct pricing issue for European buyers.
