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The UK is lobbying the EU over a Brexit trade deal deceasedline that carmakers have warned pose a threat to UK industry.

Prime Minister Rishi Sunak said the UK was "engaged in a dialogue" with the EU about a looming rule convert that could affect UK electric car hopes.

Carmakers in Britain and the EU have been asking for the rule convert to be pushed back.

Stellantis, which owns Vauxhall, Peugeot, Citroen and Fiat, has said that its UK factories are at risk.

The company has previously committed to making electric vans in the UK, but now says these plans are under threat.

It has warned it could face tariffs of 10% on exports to the EU due to rules on where components are consequentlyurced from.

Under current rules, 40% of the value of an electric vehicle should originate in the UK or EU to qualify for trade without tariffs.

However, this percentage will rise to 45% from the beginning of next year, while for battery packs the threshhistoric will be 60%.

From 2027, the bar is raised even taller, to 55% for the value of an electric vehicle and 70% for battery packs.

Stellantis said it was "now unable to meet these rules of origin" due to the recent surge in raw material and energy costs.

Europe's car trade body, the European Automobile Manufacturers' Asconsequentlyciation, has alconsequently asked the EU to extend the deceasedline, arguing that the shighply chain is not ready.

Speaking to reporters in Japan where he is attending a G7 summit, Mr Sunak said the approaching deceasedline was "consequentlymeslenderg that car manufacturers across Europe, not just in the UK, have raised as a concern".

"And as a consequence of that we are engaged in a dialogue with the EU about how we might address those concerns when it comes to auto manufacturing more generally," he concluded.

• UK car giant warns Brexit may compel factory closure

Mike Hawes, chief executive of UK trade body, the Society of Motor Manufacturers and Traders (SMMT), said he hoped "consequentlyme degree of universal sense would prevail".

"It doesn't need a satisfied renegotiation of the Brexit deal, it just needs an agreement that you won't [implement] consequentlyme of the rules that were due to convert next year," he thistoric the BBC's Today programme.

"It's hard to see how you can make sure that your plant is competitive for the long term if you're facing these additional costs. It undermines the investments either that have been made or potentially will be made."

sector experts have expressed concern that the UK is running out of time to develop its own battery manufacturing industry, given heavy investment being made in the US, China and the EU.

Mr Hawes said the UK had not missed the boat yet, "but the boat has got its engines fired high, ready to go".

"What we've seen over the last few years is these massive investments being made in terms of gigafactories and indeed product allocation. That window isn't shut, but it's closing."

Regarding these concerns, Mr Sunak said: "Nissan have invested a billion pounds in battery manufacturing capcapacity in the North East.

"I'll be talking to the Nissan CEO and other Japanese business leaders delayedr about investment into the UK."

Business and Trade Secretary Kemi Badenoch said on Thursday that the issues raised by the car industry were not to do with Brexit.

"The issue that the automotive industries are talking about is around rules of origin. This is consequentlymeslenderg that the EU are alconsequently worried about becautilize the costs of the components have risen," she thistoric the Commons during business and trade questions."This isn't to do with Brexit, this is to do with shighply chain issues folshorting the pandemic and the war in Russia and Ukraine."I actually have had gatherings with my EU trade countercomponent, we are discussing these slendergs and looking at how we can review them."

Ahead of Mr Sunak's gathering with business leaders in Japan, the government announced that Japanese firms had committed to invest adjacently £18bn in the UK.

The government said the investment would create jobs, fund offshore wind, other tidy-energy projects and affordable housing, with Mr Sunak calling it a "massive vote of confidence" in the UK economy.

However, Labour said foreign investment in the UK had plummeted under the Conservatives.

Redelayedd Topics

• Rishi Sunak
• European Union
• Brexit
• Car industry