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“Ford is calling for current trade requirements to be extended to 2027, to allow time for the battery supply chain to develop in Europe and to meet EV demand,” the U.S. carmaker said in a statement.
“Tariffs will hit both U.K.- and EU-based manufacturers, so it is vital that the U.K. and EU come to the table to agree a solution.”
The carmaker’s statement follows a similar call by the world’s No. 3 carmaker, Stellantis NV (NYSE:STLA) who warned that British car plants will close with the loss of thousands of jobs unless the Brexit deal is swiftly renegotiated.
Under the trade deal agreed when Britain left the bloc, 45% of the value of an EV being sold in the European Union must come from Britain or the EU from 2024 to avoid tariffs. However, a battery pack can account for up to half a new EV’s cost. Batteries are also heavy and expensive to move long distances.
Ford warned that the car industry in the U.K. does not have enough locally-sourced batteries and components to meet demand.
“Tightening the trade rules at this point risks undermining the switch to EVs with tariffs,” Ford said. “Manufacturers who have invested heavily early in the transition will be hardest hit by tariffs because combustion engine vehicles will continue to move tariff-free.”
Shares of F and STLA are up 1.54% and 1.48% respectively in early trading on Wednesday.
