Chinese electric cars have surged in popularity in the UK, with one in five new cars bought last month coming from Chinese brands, but this boom could be threatened by possible tariffs linked to closer EU ties.
Money-conscious motorists have flocked to buy electric cars from China, which are often significantly cheaper than Western rivals. Of the 152,730 new cars registered in the UK last month, more than 32,000 were from Chinese brands such as BYD, Jaecoo and MG.
Chinese brands dominate UK sales
The Jaecoo 7 was Britain's best-selling model, and three of the top 10 best-sellers were Chinese, according to figures from the Society of Motor Manufacturers and Traders (SMMT). China accounted for an even larger share of the just over 48,800 electric cars sold in Britain last month.
Last week, Xpeng, one of almost a dozen Chinese manufacturers already in the UK, announced plans to launch a Tesla-challenging model costing just under £33,000, one of five new models over the next 12 months. It also aims to open around 100 showrooms and service locations nationwide next year.
Possible EU-linked tariff increase
Claes Persson, Xpeng's UK boss, said: “We are here to build lasting relationships and earn the trust of British customers.”
Yet the march of the Chinese could be thwarted by possible tariffs on its cars as a result of PM Andy Burnham's desire for the UK to be part of the EU's “Made in Europe” scheme. The scheme is designed to help European car manufacturers compete against low-cost Chinese electric vehicles.
It would mean raising the UK's tariff from 10% to as much as 45%. For a Chinese electric vehicle priced at £39,600 - including VAT - the final price could rise to £52,200.
Mandate target debate and rising EV demand
At the same time, there is wrangling over watering down a legal requirement for carmakers to ensure that 80% of the vehicles they sell in 2030 are electric. Jonathan Reynolds, the business secretary, is said to want to slash the so-called zero emission vehicle mandate target to 50%, while Transport Secretary Heidi Alexander reportedly wants to cut it to about 60%. Miatta Fahnbulleh, the energy secretary, is pushing for it to remain as close to 80% as possible, it has been claimed.
Meanwhile, soaring pump prices have continued to drive sales of used as well as new electric cars. Demand for battery electric cars jumped 23.2% to 97,625 in July to September. Around one in 20 used car buyers chose an EV, up from 3.9% in the same period last year. In the year to date, used battery electric car transactions have risen 39.6% to 295,524, the SMMT said.
