Stellantis Warning

[grober]

Vauxhall-maker says UK needs to change its Brexit deal

Vauxhall-maker Stellantis is calling on the government to renegotiate some Brexit rules or risk losing UK operations.

www.bbc.co.uk

please note the warning comes from a motor manufacturing coglomerate NOT the EU-- so lets not go over oft repeated/rehearsed political arguments --- stick to the motoring aspects of this latest development

 

[st13phil]

Taking a broader view, Country of Origin rules that underpin tariffs on lots of complex products are always problematic when there are unexpected events that hit supply chains. In the case of Stellantis, it highlights another of the issues caused by the enforced headlong rush to EV's, not just for U.K.-based production, but globally.

 

[grober]

Problem seems to lie with the fact that the battery in EVs represents a higher proportion of total value/content than in conventional IC cars and its thus more difficult to fulfil the country of origin component requirements. Perhaps this is a knock-on effect from the recent cancellation of the North of England battery Giga factory?

 

[Petrol Pete]

grober

It is almost impossible for this thread not to turn political. The headline of the article is stating that someone is asking the UK government to change it's policy on the EU.

Ooops , there you go , post #4 and it's already a political issue.

Sorry.

 

[st13phil]

Problem seems to lie with the fact that the battery in EVs represents a higher proportion of total value/content than in conventional IC cars and its thus more difficult to fulfil the country of origin component requirements.

Exactly. The battery is (for the purpose of CoO content) a single component that is of disproportionately high value, and much of the battery manufacture is not just outside the UK, but also outside the EU.

Another good example of where CoO rules triggering tariffs is problematic is the USA's Inflation Reduction Act that gives preferential treatment to home-manufactured components. The difference there is that the EU are complaining about it because it will disadvantage the German car industry.

As a general principle, import tariffs linked to the proportion of value of an end item sourced in a particular country or region are hugely problematic in times of rapid change. What seems benign at the time the deal is done often turn out to cause major disruptions and distortions to trade that (ironically) harm the consumer in the nation that applies the tariffs; rarely do they turn out to do what either party thought they would over the long term.

 

[jdrrco]

I think they said on WatO that the battery accounts for over 60% of the manufacturing cost, hence the issue that Stellantis has raised.

 

[grober]

Somerset site 'eyed for multi-billion pound gigafactory'

Talks between the government and Tata are believed to be at an advanced stage.

www.bbc.co.uk

 

[grober]

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