The European Commission has proposed to delay tariffs on electric vehicles traded between the UK and EU for three years.

The Commission had initially rejected delaying the rules, but European Commission vice-president Maroš Šefčovič said on Wednesday that Russia’s invasion of Ukraine and soaring energy prices meant that EU battery production had not scaled up as planned. EU member states will still need to approve the plan at a meeting next week.

As part of the Trade and Cooperation Agreement (TCA), signed between the UK and EU in 2020, electric vehicles were initially exempt from tariffs. However, as part of the TCA, under the ‘rules of origin’, which will be set to come into effect on 1 January 2024, there would be a 10 per cent tariff applied if less than 45% of the vehicle’s value originated from outside the UK or EU.

Lobbyists from both sides of the Channel had been arguing that the introduction of tariffs now would slow uptake of electric cars by making them more expensive.

The Commission also announced that it was setting aside an additional €3 billion in subsidies to battery makers in the EU to boost the industry.