Relaxing the "Made in Europe" threshold: The EU plans to postpone imposing tariffs on electric vehicles from the UK for one year.

The European Union's "exclusive" stance on developing the new energy industry may be loosening. On Friday, October 6th, Maros Sefcovic, the Vice President of the European Commission responsible for implementing the Brexit agreement, told the media that the European Union is drafting a plan to temporarily suspend tariffs on imported electric vehicles from the UK for one year. Sefcovic stated that the European Union will interpret the relevant regulations on "European manufacturing" more leniently, allowing car manufacturers more time to shift their battery procurement from Asia to Europe. The European Commission hopes to redefine what constitutes a European product based on the so-called "rules of origin". Sefcovic did not disclose a specific timetable for the aforementioned UK tariff plan, only stating that it is under internal discussion. He also mentioned that he would be pleased if an agreement could be reached before the deadline of December 31st of this year. However, the plan revealed by Sefcovic differs from the three-year delay that the UK government hopes for. According to the Brexit agreement, the European Union is set to impose a 10% tariff on electric vehicles sold by the UK to the EU starting from next year. The UK and the EU have been negotiating the issue of tariff postponement for several months, and the EU has not made any decisions yet. Earlier this week, reports indicated that most EU member states, led by Germany, are open to delaying the imposition of tariffs. France is the main opposition, as the French government does not want to appear submissive to the demands of the UK. The media pointed out that European car manufacturers hope to delay the imposition of tariffs for three years to gain more time for the development of the battery supply chain in Europe. It is estimated that imposing tariffs as scheduled would result in a loss of 4.3 billion euros for the entire industry over the next three years, benefiting Chinese competitors. Recently, the EU launched an investigation into Chinese-made cars under the pretext of protecting its own electric vehicle industry. On Wednesday, October 4th, the EU officially initiated an anti-subsidy investigation into electric vehicles imported from China. The investigation will conclude within 13 months after its launch. The EU can impose temporary anti-subsidy duties within 9 months. However, the EU voluntarily acknowledged in its official statement that it has not received any lawsuits from the EU industry regarding this matter. The EU stated that it initiated this investigation because China's share of electric vehicles sold in Europe has risen to the current 8%. In addition, China's problem of overcapacity will lead to further increase in its market share in Europe, reaching 15% by 2025. This will pose a threat to the EU's electric vehicle industry. In response, the spokesperson of the Chinese Ministry of Commerce immediately stated that the EU's investigation is based solely on subjective assumptions about subsidy programs and threats to harm, lacking sufficient evidence and not in line with relevant rules of the World Trade Organization (WTO). China strongly opposes this. The EU has requested consultations with China in a very short period of time, but has not provided effective consultation materials, seriously damaging China's rights. The spokesperson stated that China has previously made it clear that the investigation measures proposed by the EU are under the guise of "fair trade" but are actually protecting its own industry, which is a blatant act of protectionism that will seriously disrupt and distort the global automotive industry supply chain, including the EU, and have a negative impact on China-EU economic and trade relations. China will closely monitor the follow-up investigation procedures of the European side and firmly safeguard the legitimate rights and interests of Chinese enterprises.