The Society of Motor Manufacturers and Traders (SMMT) has urged both sides to re-engage with negotiations and secure a good deal, as new calculations highlight the detrimental impact of no deal on Britain’s green recovery.

The SMMT revealed that the 10% ‘no deal’ WTO tariff would add at least £4.5bn to the annual cost of fully assembled cars traded between the UK and the EU, with an average price rise of £1,900 per EU-built vehicle sold in the UK.

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For electric vehicles, the tariff would also mean an additional £2,000 price increase on to the average cost of UK-built battery electric cars (BEV) exported to the EU – ultimately making UK products less competitive and the UK far less attractive as a manufacturing investment destination. This, according to the SMMT, would further impact the UK’s ambition to be a global leader in zero emission vehicle development, production and deployment.

Around two thirds of all battery electric cars on sale in the UK are built in European factories, highlighting the deeply integrated relationship between the two industries.

Electric vehicles have seen substantial growth in the UK market over the last five years, with 78,000 BEVs expected to be sold this year. However, the SMMT estimates that the price shock caused by the tariff increases could reduce the demand for BEVs next year by at least 20% – before taking into consideration the impact of border delays, supply chain disruption and currency fluctuations.

“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,” said Mike Hawes, chief executive of the SMMT. “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 announcement follows the news that sales in the UK new car market fell 4.4% in September, marking the worst September volume since the introduction of the dual number plate system in 1999.