The UK and the EU have agreed that existing regulations will continue until the end of 2026.
Tariffs on electric cars from next year will be avoided after the UK and the EU agreed to extend trade rules, Rishi Sunak has announced.
The Prime Minister said the UK and the EU have decided existing regulations will continue until the end of 2026.
Rules of origin requirements were due to come into force from January 1 following post-Brexit negotiations.
They would have seen tariffs of 10% imposed on car sales between the UK and the EU if at least 45% of the vehicle’s value did not originate in the UK or EU.
Manufacturers of electric cars were expected to struggle to meet that threshold as battery production in Europe has not increased as quickly as hoped.
The Society of Motor Manufacturers and Traders estimated tariffs could result in an average price rise of £3,400 on EU-manufactured pure battery electric vehicles bought in the UK.
The automotive industry had pleaded with the Government to secure an agreement with the EU to delay the changes.
Mr Sunak said: “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.”
