EU-UK TCA: Getting Made in Europe rules right
Debunking ACEA’s proposal concerning EU electric vehicle exports to the United Kingdom
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Analysts
Richard Riley
Director, Trends & Analysis
The EU-UK TCA rules of origin requirements are the most concrete local content rules for batteries we have today. This is a test case for showing Europe can get its ‘Made in EU’ agenda right.
The EU-UK Trade and Cooperation Agreement enables tariff-free trade for electric vehicles (EVs) and batteries, provided products meet rules of origin (RoO) requirements. Products that do not comply face a 10% tariff.
From 1 January 2027, battery packs and cells must originate in the EU/UK and use originating cathode active materials or max 30-35% non-originating content.
Despite having already been delayed by three years, carmakers (ACEA) are now pushing once again for a further delay to the rules. In this latest analtsis, T&E debunks their claims.
Key findings:
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T&E analysis shows EU battery production will far exceed demand from EU-UK trade in 2027. For nickel-rich NMC batteries, the EU will produce 6x what is needed to export to the UK, and for lithium-iron phosphate batteries (LFP), the EU will produce 2.4 times what is needed.
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There is enough CAM production to meet demand from EU-UK trade in TCA. In 2027, EU CAM supply will exceed what is needed for EU-built EVs exported to the UK by over a third for both NMC and LFP (and by almost five times for NCA).
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Delaying rules already agreed six years ago will weaken the credibility of EU rules and investor confidence. T&E analysis also shows that with the right steps, the tariff hit can be avoided.
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The capacity exists, and production volumes will be delivered, but supply hinges on demand from carmakers.
EU Trade Commissioner Maros Šefčovič was very clear back in 2023. Šefčovič said the Commission would introduce a "lock-in mechanism that makes it legally impossible" to give further extensions before 2032.
It is clear that the permanent TCA rules of origin must apply as of January 2027. This is vital for securing Europe’s battery value chain and maintaining investor confidence. It’s also a credibility test for the IAA and Europe’s ‘Made in EU’ ambition.
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