Britain left the European Union in early 2021 after clinching a last-gasp free trade deal, removing tariffs for the nation’s largely foreign-owned carmakers. 

However, under the deal’s “rules of origin” condition for goods crossing the border, from 2024 at least 45 percent of the value of vehicle parts must originate from Britain or the European Union in order to be exempt from customs duties. 

Batteries, which represent a significant chunk of the sale price of an electric vehicle, often originate from China despite UK efforts to establish its own gigafactories to manufacture them. 

“We are still optimistic that an agreement will be reached” before the looming change on January 1, said Mike Hawes, chief executive of industry body the Society of Motor Manufacturers and Traders.