Rishi Sunak's government has received a boost after EU officials agreed to discuss post-Brexit plans to apply a tariff on electric cars ahead of a looming 'cliff edge' deadline on whether to delay the move.
The UK is hoping the European Commission will push back the costly new tariff rules set to come into force in January 2024 as part of Boris Johnson's Brexit trade deal.
British and EU officials will meet in London on Wednesday and will discuss the tariffs on electric vehicles, with the auto industry also pushing Brussels to delay the rules.
The Brexit trade and cooperation agreement agreed in the Brexit trade and cooperation agreement will be on the agenda for a meeting of the EU-UK trade specialised committee.
New rules of origin will require car makers in Britain and on the continent to build more batteries domestically, causing Brussels to warn about an existential threat posed by the new rules of origin.
Among the final parts of the Brexit deal, Mr Johnson said, the changes require 45 per cent of an electric car's value to originate in the UK or EU to qualify for trade without tariffs.
Britain's auto industry has warned about the 'cliff edge' looming at the start of next year, which could harm the electric car industry because of the lack of domestic batteries.
The VDA - the lobby group for Germany's car industry - added to pressure on the EU Commission earlier this year by saying 'we must urgently make adjustments' to the Brexit deal.
The group warns that tariffs would pose a significant competitive disadvantage for the European car industry in relation to its Asian competitors in the so important UK market.
The UK's Society of Motor Manufacturers and Traders earlier called for a delayed Brexit until 2027.
Sunak had pushed for talks with Brussels after Vauxhall's parent company Stellantis warned that it would be unable to keep manufacturing in Britain without changes to the trade deal.
By agreeing a deal with Brussels, Sunak managed to clear up some of the post-Brexit mess by agreeing a deal for the UK to rejoin the EU's £85bn Horizon science research programme.
The UK is grappling with the challenges of increasing its battery production, with the manufacturer Britishvolt collapsing earlier this year. Tata Group, the biggest shareholder of Jaguar Land Rover, has announced plans in the summer to build an electric car battery factory in the UK.
The car giant said it is planning to invest more than 4bn in a new plant in Somerset. It was a incredibly proud moment for Sunak, who described it as a 'incredibly proud' moment.