British Prime Minister Rishi Sunak is looking to enroll German Chancellor Olaf Scholz to help delay upcoming tariffs on electric vehicles shipped between Britain and the European Union, according to people familiar with the matter.
Sunak tapping the leader to the home of Volkswagen, BMW and Mercedes comes as the EU is not moving from its timetable with a phase-in starting next year.
The looming 10 percent tariff on EVs crossing the Channel could cost the industry 4.3 billion euros ($4.7 billion) and boost competition from China, industry association ACEA said last month.
Britain has raised the issue directly with Berlin, one of the people said.
Spokespeople for Downing Street and the German government declined to comment.
Under the U.K.’s post-Brexit arrangements, EVs traded between Britain and the EU from next year will attract a 10 percent tariff if less than 45 percent of their value comes from the region.
Britain and European automakers want to extend the planned phase-in period by three years, when the full set of so-called rules of origin provision comes into force, allowing more time for the region’s battery supply chain to develop.
The goal of the regulation in its current form is to support cell production in the EU, a European Commission spokesperson said, crucial in competing in the EV transition where Asian players dominate on battery making.
But internal discussions are ongoing, according to people familiar with the matter. It would make more sense to focus directly on the later 2027 date because getting the continent’s battery supply chain ready in time for next year was not realistic, one of the people said, and the bloc should work with the industry to meet that. A final decision has not been taken, the person said.