UK-EU trade deal avoids a 10% levy on cars as long as they meet a minimum level of locally sourced parts.
Japanese carmaker Nissan will source more batteries from the United Kingdom to avoid tariffs on electric cars after the UK’s trade deal with the EU, which, according to a senior executive, turned Brexit from a risk into an opportunity for its factory in northeast England.
Chief Operating Officer Ashwani Gupta also told the Reuters news agency that Brexit-related problems at ports since January 1 were “peanuts” for Nissan, which has had to handle COVID-19 and natural disasters.
Following the UK’s departure from the European Union, London and Brussels struck a trade deal on December 24 that avoided major disruption as well as a 10-percent levy on cars, provided they meet local content rules.
Nissan makes about 30,000 Leaf electric cars at its Sunderland factory, most with a locally sourced 40 kilowatt-hour battery. They remain tariff-free.
But more powerful versions use an imported system, which will now be bought in the UK, creating jobs.
“It will take a few months,” Gupta told Reuters.
“Brexit, which we thought is a risk … has become an opportunity for Nissan,” he added.
Asked about trade disruption, Gupta told reporters: “When I look at how Nissan has come out from the crisis of [a] tsunami, earthquake, flood, last week snow, tornadoes … the startup problem which we are seeing in the ports is peanuts.”
“For a global manufacturer … to have additional documentation to fill a form at the border is nothing. People prepared for it, we have updated our software, we have updated our processes. It’s OK.”
The effect of Brexit will vary between auto producers.
Nissan opened what is now the UK’s biggest car plant in 1986 and made nearly 350,000 vehicles there in 2019.
In contrast, Ford, which imports everything it sells in Britain, has raised some UK prices due to US-sourced content.
Without any electric car output in the UK, Carlos Tavares, the chief executive of Stellantis – recently formed from the merger of Fiat Chrysler and France’s PSA Group – has criticised a UK ban on the sale of new conventional cars from 2030, as it decides the future of its factory.
But Gupta said the UK’s policy would boost Nissan’s British-made models.
“The market will pull more and more electrified cars, which means the return on investment on these kind of technologies will be better and better day by day.”