Read new rules about electric cars that could cost manufacturers billions 

An industry organization has said that new Brexit trade rules covering electric cars could cost European carmakers £3.75bn over the following three years.

The laws are meant to assure that EU-produced electric automobiles are primarily made from locally sourced parts.

But carmakers on both sides of the Channel say they need to prepare.

The European Automobile Manufacturers Association (ACEA) even cautioned the measures could lower output from EU factories by 480,000 cars.

And they said consumers would pay the price.

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The main issue is so-called “rules of origin,” which came into power in January. They apply to freight of vehicles across the Channel under the terms of the Brexit agreement, the UK-EU Trade and Cooperation Agreement.

They will ensure that electric cars must have batteries made in the UK or the EU. Vehicles that do not meet the measures will face 10% taxes – or tariffs – when transported across the Channel in either path.

The laws were created to protect the European industry from affordable imports. However, because battery production in Europe has yet to ramp up as fast as expected, manufacturers are struggling to meet the new standards.

It is a severe issue for European carmakers. The UK is their largest export market, with 1.2 million cars arriving at UK docks last year. Likewise, more automobiles built in the UK are transported to the EU than any other territory.