Källenius Warned Against UK Exclusion From EU Act
The Mercedes-Benz CEO cautioned that excluding the UK from a key industrial policy harms the European automotive market.
Updated on Oct. 14, 2026 in Electric Vehicles
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Ola Källenius argued that the Industrial Accelerator Act should include the UK to better protect the regional automotive sector from foreign competition. The warning comes as industry groups lobby to delay looming 10% tariffs on electric vehicles traded between the UK and EU.
Why it matters
The proposed legislation seeks to counter non-EU trade pressure and incentivize local battery production, but officials fear the current framework creates trade friction. Excluding the UK could hinder the integration of supply chains in a sector where batteries already account for nearly half of a new vehicle's cost.
Batteries currently represent approximately 45% of the total cost of a new car. Meanwhile, China maintains a £1 billion daily trade surplus with the EU, influencing new tariff policies.
The players
Ola Källenius
He is the chairman of the board of management at Mercedes-Benz Group AG.
ACEA
The European Automobile Manufacturers Association represents the interests of the major car, van, truck, and bus manufacturers in the EU.
The details
Industry leaders, including the ACEA, are actively pushing for a suspension of the 10% electric vehicle tariffs to avoid market disruption. Additionally, Beijing and Brussels have reached an agreement to cut hybrid electric car sales by half over the next four years.
Timeline
The EU introduced tariffs on imported Chinese vehicles in 2024.
EU officials urged the UK to adopt similar tariff measures in October 2026.
The UK prime minister plans to address the legislation at a UK-EU summit on November 20, 2026.
The EU targets a political agreement on the Industrial Accelerator Act for December 2026.
The 10% electric vehicle tariffs are scheduled to take effect in January 2027.
Roadmap
This dispute marks a critical moment in the transition to electric vehicles as automakers navigate complex post-Brexit trade barriers. It highlights the tension between protective industrial policies and the need for seamless cross-border supply chains in the European market.
Car buyers could face higher vehicle prices if the 10% tariffs on electric vehicles are implemented as scheduled in 2027. The outcome of the upcoming summit may determine whether manufacturers can avoid these additional costs, which would ultimately influence the final retail MSRP.
The takeaway
Automakers are pushing for stability as global trade policies shift the cost of manufacturing and vehicle pricing. Consumers should monitor trade talks closely as they directly influence the affordability of electric vehicle technology in the coming years.
What happens next
The UK prime minister is scheduled to discuss the inclusion of the UK in the Industrial Accelerator Act during the upcoming UK-EU summit on November 20, 2026.
Further reading
Learn more about the shifting regulatory environment in the Electric Vehicles section.
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