EU bureaucrats have backed down over plans to impose costly tariffs on electric cars imported from the UK.
The European Commission wanted to bring in the protectionist measure on the back of the Brexit trade deal.
But it caved in as the EU needs electric vehicles and parts manufactured here to hit net zero targets.
Former Brexit minister David Jones said: “The European Union is starting to realise it’s better for them to work in partnership, with a resurgent UK, rather than trying to frustrate us.”
Rules of origin requirements were due to come in from January 1, following post-Brexit negotiations.
Tariffs of 10% would have been put on imported UK car sales if at least 45% of the vehicle’s value did not originate in Britain or the EU. It could have added an average of £3,400 to the price.
Manufacturers were expected to struggle to meet the threshold as battery production has not increased fast enough in Europe.
PM Rishi Sunak, who visited Nissan’s Sunderland plant last month, said: “This breakthrough will come as a huge relief to the industry. The Government is delivering a pragmatic solution to keep costs down for businesses and for people who want to make the switch to electric vehicles.”
It comes as production is back on track, according to a report.
The Society of Motor Manufacturers and Traders said it rose 14.8% in November compared with a year ago, the best performance for the month since 2020.
