EV makers will likely pass on additional costs incurred as a result of new 'rule of origin' tariffs due from 1 January because the most valuable part of these cars - the batteries - are not sourced domestically.
With only a handful of EVs on the market today for under £30,000 and premium price tags one of the biggest reasons for drivers not to buy one today, there are major concerns that increased pricing will further reduce consumer appetite and slow the transition to electric cars.
The Society of Motor Manufacturers and Traders (SMMT) has called on the UK and EU to postpone the implementation on EV batteries until 2027, stating: 'Not only would consumers be out of pocket, but the industrial competitiveness of the UK and continental industries would be undermined.'
Rule of origin tariffs of 10 per cent are due to be imposed on exports of electric cars between the UK and EU from January 1 if at least 45 per cent of their value does not originate in the UK or EU.
Manufacturers will struggle to meet that threshold as battery production within Europe has not increased as quickly as hoped.
Many European car makers source batteries from overseas markets, notably China, as they await the construction of a number of battery 'gigafactories' on the continent.
Speaking before an SMMT virtual global trade conference, the organisation's chief executive Mike Hawes said the rules threaten the Government's Net Zero targets.
'UK automotive is a trading powerhouse delivering billions to the British economy, exporting vehicles and parts around the world, creating high value jobs and driving growth nationwide,' he said.
'Our manufacturers have shown incredible resilience amid multiple challenges in recent years, but unnecessary, unworkable and ill-timed rules of origin will only serve to set back the recovery and disincentivise the very vehicles we want to sell.
'Not only would consumers be out of pocket, but the industrial competitiveness of the UK and continental industries would be undermined.
'A three-year delay is a simple, common-sense solution which must be agreed urgently.'
Commenting on the prospect of EVs becoming even pricier from next year, Auto Trader's commercial director Ian Plummer said: 'With new electric cars on average a third more expensive than petrol and diesel counterparts, the last thing the road to net zero needs is extra demands on peoples' pockets.
'A delay to the extra charges is a significant and much needed step the political sphere can take to help with mass electric adoption.'
The SMMT estimates these new 10 per cent tariffs will see the average price rise by £3,400 for EU-manufactured EVs bought in the UK, which represents half (49 per cent) of all electric car registrations currently.
The trade body says this will result in a combined cost of £4.3billion to Britons.
The tariff will only impact EVs, as conventional internal combustion engine cars are likely to meet the requirements of the post-Brexit rules with ease.
The SMMT says that because petrol and diesel vehicles would escape the tariffs, it would 'have the perverse effect of incentivising the purchase of fossil fuel-powered vehicles'.
It described a three-year delay in implementing the new rules of origin requirements as 'a pragmatic solution' as it would allow time for European battery production to ramp up.
For the best Uk car & Van leasing deals head here