Outlook for 2025: Steering Through Tariff, Trade, and Regulatory Shifts for EVs and Logistics

As 2025 approaches, international trade is poised for substantial changes. Evolving tariffs, new regulations, and an intensified global focus on sustainability are reshaping the playing field. For businesses in the electric vehicle (EV) and logistics sectors, these changes represent both challenges and opportunities.

In this article, we’ll break down the key shifts in tariffs and regulations expected in the coming year and explore how they could impact the EV and logistics industries. Our goal is to provide actionable insights to help you navigate this changing landscape with confidence.

The Growing EV Market

In recent years, the global push toward sustainability has catalysed remarkable growth in the electric vehicle market. Governments worldwide are setting ambitious targets for EV adoption to reduce carbon emissions and combat climate change. However, this transition is not happening in isolation; it is deeply intertwined with the dynamics of international trade and regulatory frameworks, particularly concerning tariffs and the shipping of hazardous materials.

Anticipated Tariff Changes

Countries are actively working to protect their domestic industries while promoting sustainable development. As a result, discussions around adjusting tariffs are gaining momentum, particularly concerning raw materials essential for EV production, such as lithium, cobalt, and nickel. Additionally, tariffs on finished EVs and components are expected to fluctuate due to geopolitical tensions and evolving trade agreements. Here are a few key areas to watch:

Import Tariffs on EVs 

To incentivise domestic manufacturing, some countries will impose higher tariffs on imported EVs. While this could support local manufacturers, it may also lead to increased prices for consumers, potentially hindering adoption rates.

Raw Material Tariffs

The EV industry's heavy reliance on specific raw materials for battery production means that any changes in tariffs could significantly impact manufacturing costs. Nations might impose export tariffs to ensure local availability, which could disrupt established supply chains and complicate material procurement.

Bilateral Trade Agreements

As countries negotiate and revise trade agreements, tariff adjustments are likely to have varied effects on EV manufacturers, creating a complex landscape of cost implications for logistics and transportation. When shipping to the EU, it is essential to understand the rules of origin, including which countries are considered preferential origins. These countries enjoy reduced tariffs, which can significantly impact your costs. Additionally, it’s important to be aware of the necessary documentation required for customs clearance to ensure a smooth trading process.

Changes in Shipping EVs: New UN Regulation for Lithium-Ion Batteries

A pivotal regulatory change involves the transition from the previous UN3171 classification to UN3556 for lithium-ion battery-powered vehicles. This update, adopted by the UN Subcommittee during its 61st session in December 2022, aims to mitigate risks associated with lithium-ion batteries in air transport.

- Transitional Period: A three-month transitional period is currently in effect until April 1, 2025, during which shippers can still use the UN3171 classification for vehicle transport.

- Reduced State of Charge: Starting January 1, 2026, lithium-ion batteries packaged with equipment and vehicles will need to be transported with a reduced state of charge. Specifically, the battery must be charged to no more than 30%, and its indicated capacity should not exceed 25%. This regulation is critical for enhancing safety during transport.

Looking Ahead

It is imperative for businesses within the EV and logistics sectors to remain vigilant regarding anticipated tariff changes and new regulations. Adaptability, innovation, and collaboration will be vital to mitigating risks and unlocking emerging opportunities.

In conclusion, while shifting tariffs and regulatory landscapes present challenges, they also open pathways for growth and innovation. By proactively addressing these evolving dynamics, the EV and logistics industries can position themselves for success in an increasingly complex global market.

Our commitment to staying informed extends not only to collaborating with industry experts and remaining active members of BIFA, but also to communicating closely with our clients. Understanding their strategies allows us to facilitate the logistics side effectively and help evaluate new supply chain costs. We also maintain strong partnerships with Dangerous Goods and Customs Experts worldwide to grasp the implications of regulatory changes across different destinations.