EV industry faces challenges amid EU tariffs and net zero policies

The latest advancements in electric vehicle (EV) technology are being showcased at the London EV Show this week. Automakers from across the globe, including prominent Chinese companies, have gathered to present their innovations. However, the event coincides with a period of uncertainty for the industry, marked by challenges and evolving international trade policies.

Stellantis, the parent company of brands like Peugeot, Citroën, and Fiat, was notably absent from this year's event. The automaker recently announced the closure of its Vauxhall van factory in southern England, potentially affecting 1,100 jobs. 

Earlier this year, Stellantis urged the UK government to boost EV demand to meet regulatory targets. The company has since joined manufacturers like Ford, Nissan, and Volkswagen in announcing job cuts amid concerns over the affordability of electric vehicles for consumers.

Ford UK's managing director, Lisa Brankin, has called for increased incentives for EV buyers, describing the 2030 ban on new combustion engine vehicle sales as challenging to achieve under current conditions. 

Additionally, the Society of Motor Manufacturers and Traders (SMMT) reported that British car production has declined for eight consecutive months, with October's output falling by 15.3 percent compared to last year. Electrified vehicle production saw a 32.6 percent decrease in the same period.

The SMMT has warned that compliance with Britain's 2024 EV sales mandate, which requires automakers to ensure at least 22 percent of new car sales are electric, could cost manufacturers over $7.5 billion. In response, UK Finance Minister Rachel Reeves announced a consultation to review these targets.

Meanwhile, international trade tensions are impacting the industry. Last month, the European Union introduced tariffs of up to 45.3 percent on Chinese-made EVs, a policy set to last five years. At the London EV Show, manufacturers expressed concerns about potential effects on pricing and trade. 

Michelle Zhang, Sales Director at Shenzhen Sinotek Technology, noted that the tariffs could make Chinese EVs more expensive for European buyers. Peter Chen, Vice General Manager of MDS, highlighted the possibility of reduced demand affecting related industries, such as EV charging supplies.

As China and the EU continue negotiations, potential supply chain disruptions and higher costs remain a concern. For an industry navigating declining sales and ambitious net-zero goals, the evolving regulatory and trade landscape underscores the importance of strategic adjustments to maintain stability and foster growth.