Europe's automakers have again called for an additional delay to rules of origin for electric vehicle batteries, putting the credibility of European industrial policy to the test. On Oct. 2, local time, EV outlet CleanTechnica reported that T&E, Eurometaux and Cefic sent a letter to the EU executive urging it to apply the rules of origin under the EU-UK Trade and Cooperation Agreement (TCA) as scheduled.

The dispute centres on a rule requiring EVs to use European-made batteries and cathode materials to qualify for tariff-free benefits in the British market. The EU and Britain have used the standard to encourage investment in battery materials production and supply chains in Europe.

The EU and Britain accepted a request from automakers in December 2023 and delayed implementation by 3 years. The agreement at the time said further delays should not be considered and also limited the possibility of changing the rules before 2032.

With 3 months to go before the rules take effect, automakers are again seeking a delay. Battery and materials companies pushed back, saying carmakers want to keep using cheaper Chinese materials while retaining tariff-free benefits in the British market. The European Automobile Manufacturers' Association (ACEA) also acknowledged in its letter that the industry could face criticism that it acted in bad faith regarding an integrated European battery supply chain.

Battery and materials companies also rejected the claim that the supply chain is not ready. Recharge, the European battery industry association, forecast the EU's cathode material production capacity would reach 121,000 tonnes in 2027. That exceeds estimated demand of 52,000 to 75,000 tonnes needed to meet the TCA requirements. The industry said what European suppliers need now is not an additional delay but purchases by automakers.

Maros Sefcovic (마로시 셰프초비치) promised legal certainty over the applicable rules when the delay was agreed in 2023. The industry said companies and investors made investment decisions on the premise the extension would be a one-off.

The industry said another postponement could weaken the demand base that has supported a European battery supply chain. It said the TCA rules of origin also tie into a future Industrial Acceleration Act, and an additional delay could damage Brussels' made-in-Europe plan. The groups urged that from 2027 the TCA's permanent rules of origin should be applied without exception.