UK reportedly weighs tariffs on Chinese electric cars as brands near a quarter of new-car sales

Tariff package reportedly being drawn up

Britain is considering imposing tariffs on Chinese electric vehicle imports amid concerns that Beijing is flooding the market with state-subsidised cars, The Times newspaper reported on Sunday. Business Minister Jonathan Reynolds is drawing up a package of potential tariffs on Chinese vehicle imports, the report said, citing concerns that Chinese manufacturers are "dumping" subsidised vehicles into Britain. Reuters, which reported The Times' findings, could not immediately verify the report. ¹²⁷⁸

Asked to comment, a spokesperson for the British government told Reuters no tariffs have been imposed on Chinese EVs. "We continue to engage closely with industry so that our approach reflects the sector's and UK's national interests," the spokesperson said in an email. The status of any tariff decision therefore remains unconfirmed, with the reported package described as potential rather than announced policy. ¹⁷

According to The Times, citing senior government sources, ministers believe any decision on tariffs should be based on Britain's national interest rather than automatically following the EU's lead. The Guardian separately reported that Reynolds had said last week tariffs on Chinese EVs were "always kept ... under close review", and had previously argued any UK levies would "probably be reciprocated", costing British manufacturers sales in China. ¹⁶⁴

Matching the EU's 45 per cent levy

British ministers are ready to match the European Union's 45 per cent levy on Chinese electric cars, The Times reported, to avoid the pain of the EU's proposed "Made in Europe" measures, which could affect UK companies selling into the EU. The report said ministers are keen to avoid exclusion from the scheme, under which subsidies, tax breaks and public procurement would be restricted to vehicles built within the EU. ¹⁷⁴

The EU's "Made in Europe" policy, also referred to in reports as the Industrial Accelerator Act, is aimed at reducing reliance on Chinese components by prioritising European-made goods. The Guardian reported the UK is reviewing whether to impose tariffs to strengthen its case for inclusion in the legislation, with Brussels believing the UK would need tariffs to create a level playing field. The Financial Times reported in September that Brussels had urged Prime Minister Andy Burnham to align more closely with EU trade policy if Britain wants to avoid the barriers. ¹⁶⁴

Burnham said last month he would argue Britain should be treated as a "trusted partner" under the proposed EU rules, warning that excluding the UK could damage its car industry. The Guardian reported the EU accounted for 58 per cent of UK car exports in the first half of 2026, compared with about 4 per cent for China, underscoring the stakes for British manufacturers. ¹⁴

Chinese brands' rapid UK gains

The market context behind the reported tariff work is a sharp rise in Chinese-brand sales. The Times reported Chinese electric vehicles took 23 per cent of UK new-car sales in September, nearly one in four cars sold. The Guardian, citing figures from the Society of Motor Manufacturers and Traders released on Monday, reported brands such as BYD, Leapmotor and Jaecoo more than tripled their share of the UK new-car market in 2026, reaching 12 per cent of sales. ³⁶

By brand, the SMMT figures reported by The Guardian show BYD almost doubled its share of the UK market in September 2026 year on year to 5.75 per cent, and lifted its year-to-date share from 2.2 per cent to 3.93 per cent with 68,000 cars sold to the end of September. Jaecoo's share grew 223 per cent with 58,000 sales, while Leapmotor sales soared 765 per cent, from about 1500 cars in 2025 to more than 13,000 this year. ⁶

Market Briefs, citing The Times, reported the month's top-selling model was Chery's Jaecoo 7, an SUV priced at about £30,000 that has been dubbed the "Temu Range Rover" on social media. Chery is in talks to build cars at Nissan's Sunderland plant, and Nissan's European chair Massimiliano Messina said last month: "Europe cannot have a Trojan horse where the Chinese are going to flood the market" through imports via Great Britain. Victor Zhang, UK managing director for Jaecoo and Omoda, responded: "Tariffs come and go but it won't change our investment in the UK. We are here to stay." ⁵⁶⁴

Industry voices urge caution and clarity

The Society of Motor Manufacturers and Traders has urged a negotiated path. Its chief executive, Mike Hawes, said any consideration of tariffs needed to be based on "robust evidence" and maintain a rules-based open and competitive market, adding that "trade restrictions can have unintended consequences". He said the immediate priority should be a pragmatic agreement recognising the UK as a trusted "Made in Europe" partner, warning that excluding UK-built vehicles would jeopardise an €80 billion trading relationship. ⁶⁴

Emily Sawicz of consultancy RSM UK told The Guardian the UK car industry faces "a difficult trade-off" between China and Europe, with Chinese investment a potential "lifeline" for carmakers while access to Europe is "crucial" for smaller manufacturers. "Manufacturers need clarity on which direction the government intends to take so they can make long-term investment decisions," she said. ⁴

What tariffs could mean, and process hurdles

The Guardian reported the UK has been an outlier in choosing not to tax Chinese vehicle imports, even as the US has shut them out almost entirely and the EU has imposed duties of up to 45 per cent since October 2024. Chinese EV maker BYD's vehicles attract 100 per cent tariffs on entry to the US, according to imagery captioning carried with the Reuters-sourced reports. Any UK tariff decision would also involve a lengthy World Trade Organization process; the EU's own investigation took 13 months from launch to imposing tariffs. ⁶⁴¹

The Times reported UK officials are concerned potential Chinese countermeasures could target Jaguar Land Rover, but have concluded that being dropped from the EU's "Made in Europe" mechanism would inflict far greater economic damage. The Guardian reported imposing tariffs would probably prompt a hostile response from Beijing and would break with the previous government positioning of the UK as an ally to China as a source of economic growth. Brussels also views Chinese manufacturers building cars in Europe, such as BYD's plant in Hungary, as less of a threat, with those vehicles not subject to import duties, and the EU trade commissioner, Maroš Šefčovič, is visiting Beijing this Wednesday for trade-reset talks. ⁵⁶

The durability of any EV-only UK tariffs is also open to question. The Guardian reported that after Brussels raised its tariffs on Chinese EVs in 2024, imports of plug-in and battery hybrid cars surged as Chinese exporters pivoted, and the EU is now facing calls for fresh barriers on hybrid imports, potentially quotas or price floors. ⁴

EV demand picks up globally, including Australia

The tariff debate lands amid a broader recovery in EV demand. The Age and The Sydney Morning Herald, reporting with Bloomberg, noted the US outlook is brightening after last year's slump that followed the elimination of the federal $US7500 EV tax credit. Tesla delivered 486,532 vehicles worldwide in the third quarter, according to the company, beating the average analyst estimate of 463,761 compiled by Bloomberg, and Rivian also posted better-than-expected sales. Hyundai's North America chief executive Randy Parker attributed the recovery partly to higher fuel prices: "Because of the war, because of gas prices, we've also seen a rise and a recovery in EV sales." ¹²

For Australian readers, the same report cited the Electric Vehicle Council's latest annual figures, released in September, showing a record 157,958 electric vehicles were sold in the six months to June, more than double the same period a year earlier, comprising 103,716 battery-electric vehicles and 54,241 plug-in hybrids. That equated to an electric vehicle sold every 100 seconds in the first half of 2026, with EVs expanding from 10 per cent of Australia's new-car market last year to more than 25 per cent, or one in four new cars sold, as of September. ¹²