British motorists could save over £3,000 after a new post-Brexit agreement with the European Union which came into effect from January 1.
Just before Christmas, both sides agreed on an extension to the existing Trade and Cooperation Agreement (TCA) which prevented extra tariffs from being levied on electric cars.
Under previous rules, tariffs were expected to rise gradually over the next three years with the first increase due to start from January 1 2024.
However, the new deal means existing “rules of origin” will remain in place until the end of 2026.
This has prevented 10 percent tariffs being slapped on EVs from January in a victory for UK motorists.
Prime Minister Rishi Sunak was thrilled with the new extension as he described it as a massive boost for the motor industry.
He explained: “We have been listening to concerns of the sector throughout this process, and I know this breakthrough will come as a huge relief to the industry.
“The UK Government is delivering a pragmatic solution to keep costs down for businesses and for people at home who want to make the switch to electric vehicles.
“We are also leaving no stone unturned to bolster our domestic battery industry and deliver long-term certainty for our thriving automotive sector to help them grow their roots in the UK.”
The Government admitted they had “made it a priority” to fund a joint solution with the EU on electric car tariffs after listening to the concerns of the automotive industry.
The Society of Motor Manufacturers and Traders (SMMT) previously warned fully electric vehicles made in the EU could be subjected to a staggering £3,400 tax hike when sold in the UK under new tariff rules.
Mike Hawes, SMMT Chief Executive said the continuation of tariff-free trade would have a noticeable knock-on effect for consumers.
He commented: “Deferring the rules of origin is a win for motorists, the economy and the environment. Maintaining tariff-free trade in EVs will ensure consumers retain the widest and most affordable choice of models, at a time when we need all drivers to make the switch.
“Governments have listened to the sector and acted to safeguard the competitiveness of the EU and UK automotive industries and give the Anglo-European battery industry the critical time it needs to catch up.
“The measure will help cut carbon, support growth and jobs, and is the right decision for the decarbonisation of road transport.”
