Brexit may see new car prices soar by up to £2,800 which may ‘put the brakes’ on industry
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A no-deal Brexit would add 10 percent tariffs on cars traded between the UK and EU which could see costs rise by thousands. The SMMT has predicted that this would see an average price rise of £1,900 per vehicle in the UK.
However, this could rise to £2,800 for EU built electric vehicles due to the expensive battery technology.
The SMMT warns this could make the government’s £3,000 Plug-In grant incentive “null and void” as this would be used to simply pay off the extra charges.
The increased tariffs could add £2,000 on top of the average cost of UK built electric cars exported to the EU making products built-in UK firms less attractive.
The SMMT warns this could hold back the evolution of the electric car, stopping it from becoming affordable to the masses.
Mike Hawes, Chief Executive of the SMMT said a no-deal would “put the brakes” on the recovery of the car market.
He has called for a free trade deal which will ensure consumers have a choice in accessing electric vehicles they need now the nation is just years away from a proposed petrol and diesel car ban.
He said: “Just as the automotive industry is accelerating the introduction of the latest electrified vehicles, it faces the double whammy of a coronavirus second wave and the possibility of leaving the EU without a deal.
“As these figures show, ‘no deal’ tariffs will put the brakes on the UK’s green recovery, hampering progress towards net zero and threatening the future of the UK industry.
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“To secure a truly sustainable future, we need our government to underpin industry’s investment in electric vehicle technology by pursuing an ambitious trade deal that is free from tariffs, recognises the importance of batteries in future vehicle production and ensures consumers have choice in accessing the latest zero-emission models.
“We urge all parties to re-engage in talks and reach agreement without delay.”
The SMMT has also warned that the UK lags behind many of Europe’s major vehicle markets when it comes to electric vehicles
Road users in Germany can secure over £8,000 in free money when purchasing an electric car while French residents can secure up to £6,350.
They have wanted the UK government would also need to massively invest in charging infrastructure before the nation is ready to switch to zero-carbon vehicles.
However, road users could be set to make the switch even if prices rise, according to a new study from BuyaCar.co.uk.
They found that 47 percent of potential buyers expect new car prices to increase as a result of leaving the EU.
Despite this, one in three still intend to purchase a new car with 42 percent aiming to buy between the end of this year and early 2022.
Christofer Lloyd, editor of BuyaCar.co.uk said the findings offer “reassurance” to manufacturers concerned about the effect price roses could have on their business.
He said: “Particularly welcome is the fact that a large proportion of motorists seem to have already taken the potential for Brexit-related price inflation into account, given the unfortunate timing of a global pandemic and a major shift in the way Britain trades internationally.
“Used car trade has been exceptionally strong in the aftermath of Britain’s general coronavirus lockdown and BuyaCar.co.uk posted the biggest sales figures in its 18-year history this summer.
“But healthy new car sales are essential for generating the used cars that most of us buy.
“The fact that so many people expect to go ahead with their plans to buy a new car in particular, regardless of any change in prices, will be a relief to manufacturers and all the ancillary businesses that support them across the UK.”
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