Jaguar Land Rover joins Vauxhall maker in criticising Brexit deal, piling pressure on Sunak – inews

The current Brexit deal is unrealistic and counterproductive for electric car manufacturing and needs to be changed, Jaguar Land Rover (JLR) has warned.

JLR, which employs around 30,000 people, has joined Vauxhall maker Stellantis in criticising the current requirements of the Brexit Trade and Co-operation Agreement (TCA) negotiated by Boris Johnson and the EU.

Both firms are calling for a new timeline to delay the introduction of the so-called rules of origin covering where parts must be sourced from, which they say will make their vehicles uncompetitive.

It is understood JLR supports the overarching intent of the legislation, but a spokesperson told i: The proposed timelines for the battery rules of origin under the TCA are unrealistic and counterproductive.

We echo the call for the UK and EU to quickly agree a better implementation to avoid destabilising the industrys transition to clean mobility.

The remarks add to pressure on Rishi Sunak and the Government to negotiate a delay with the EU to the rules of origin beyond January 2024. Under the current proposed timeline, from next year, 45 per cent of the value of an electric car should originate in the UK or EU to qualify for trade without tariffs.

i understands that the EU is not willing to reopen the TCA, which clearly states the rules will kick in from January, with a European Commission document in March making clear it was willing to make only technical adaptations.

It comes after Stellantis, which owns Vauxhall, Peugeot, Citroen and Fiat, said it can no longer meet rules on where parts are sourced and warned there could be significant job losses.

Car manufacturing remains one of the countrys highest value industries, employing 182,000 people in the UK and contributing 67bn a year in turnover to the economy.

But with the average vehicle requiring around 500 components sourced from all over the world, it was always one of the industries most vulnerable to the UKs decision to leave the EU.

The Governments decision to move from petrol and diesel engines to electric vehicles to meet its net zero target, which comes into play from 2030, has further accelerated the need for clarity on trade rules.

Stellanis and other car manufacturers are struggling to source the electric batteries they need to build their vehicles in the UK due to a lack of domestic production.

While there are around 300 gigafactories being built to supply them around the world, including 40 in mainland Europe, there are currently none in the UK.

The governments attempts to kickstart the industry with a plant in Blyth, Northumberland, were dealt a blow with the collapse of Britishvolt earlier this year.

In the meantime, car manufacturers are having to import parts from elsewhere and face being subject to tariffs.

An industry source told i all the other names in the UK market will be affected to one degree or another by the current situation.

Everybody is in the same position, the source said. The battery in an electric vehicle is a large, expensive component so it makes up a big percentage of the total cost of the vehicle.

Nissan have their joint venture, they have a small gigafactory next to the plant in Sunderland, so theyve got their supply sorted out.

Toyota dont currently make their electric vehicles in Derbyshire but they could do, Jaguar Land Rover in the Midlands are shortly going to be making electric vehicles, theyve said they will source batteries elsewhere.

Theres smaller players like Bentley and Rolls Royce, Aston Martin, but the lower the cost of the car the more an issue it is.

If its a Rolls Royce or a Bentley that costs 300,000 you can absorb it.

But Stellantis operates in the volume end of the market, they are very price sensitive which is why its particularly big for them.

Toyota declined to comment. Bentley, Rolls Royce and Aston Martin were also contacted for comment.

The car manufacturing industry has been warning of issues around Brexit for years but the situation has become more acute.

It is a worrying time, the industry source added.

Weve always known this was coming as a result of the Brexit deal but its been a bit of a slow burn. Its something that needs to be looked in the eye now. This is a massive issue, particularly for the car industry.

The UK needs a battery industry, it needs big infrastructure projects such as five or six gigafactories so that we can supply the domestic car industry.

Car manufacturers have been warning the Government of these issues for some time.

In a submission to the Business and Trade Committee in June 2022, Nissan said: To ensure gigafactory production capacity in the UK, model allocation to manufacture EVs (electric vehicles) in UK plants like Nissans in Sunderland is essential.

There is a vital need to fulfil rules of origin requirements for UK battery content required to export EVs, not just to Europe but also to the rest of the world, and to create the supply-side demand that is necessary to justify the establishment of an EV battery supply chain and battery manufacturing presence in the UK.

Industry body, the Society of Motor Manufacturers and Traders (SMMT), echoed those warnings in February this year, writing: Despite a sharp rise in announced investment in regional battery supply chains, the current manufacturing capability in the EU and the UK does not allow our sector to meet upcoming origin requirements for batteries and battery parts.

With the rapid acceleration of demand for EVs, analysis by industry stakeholders such as the European Battery Alliance and the APC show that regional supply capabilities will not be able to satisfy the EU and UK demand for battery-related technologies by 2025, with significant gaps in cathode and anode production.

Given the lack of production capabilities of critical parts, including cathode active materials, the provision for a change of tariff heading cannot be met by 2024, while the steep increase in prices of raw materials result in very significant challenges to meet overly ambitious value-added rules for the foreseeable future.

A Government spokesman said: The Business and Trade Secretary has raised this with the EU and is determined to ensure the UK remains one of the best locations in the world for automotive manufacturing, especially as we transition to electric vehicles.

We are supporting the industry through the Automotive Transformation Fund and Advanced Propulsion Centre to develop a high-value end-to-end electrified automotive supply chain in the UK and support cutting-edge automotive technologies.

In the coming months, the Government will build on these interventions with decisive action to ensure future investment in zero emission vehicle manufacturing.

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Jaguar Land Rover joins Vauxhall maker in criticising Brexit deal, piling pressure on Sunak - inews