UK may impose tariffs on Chinese electric cars

In October 2026 Business Secretary Jonathan Reynolds told The Times the government is reviewing possible tariffs on Chinese electric cars, warning that cheap imports could undermine UK climate targets and domestic manufacturers. Dealers should watch for policy changes that may affect pricing and stock sourcing.

Key takeaways

• The government is reviewing tariffs on Chinese EVs but has no immediate implementation plan.
• European tariffs on Chinese electric cars currently sit at 45 per cent.
• Up to a quarter of UK new‑car sales in September were Chinese‑made, raising concerns for domestic makers.
• Loss of the ‘Made In Europe’ scheme could limit UK exporters’ access to EU incentives.
• Industry leaders say any tariffs may be absorbed by manufacturers in the short term.

Government review of Chinese EV tariffs

Reynolds said the surge in Chinese electric vehicle sales is under close review, but he confirmed there are no immediate plans to introduce duties. He highlighted that importing low‑priced models could jeopardise the UK's climate objectives and hurt home‑grown producers.

The minister added that any future tariff could be aligned with the 45 per cent duty already applied by the EU, especially if Britain loses access to the ‘Made In Europe’ scheme that currently supports UK exporters.

Potential impact on UK‑built vehicles

Chinese electric cars accounted for roughly 25 % of all new‑car registrations during the September 76‑plate market, a sizable share that threatens domestic market share. Around 60 % of cars built in the UK are destined for the EU, making tariff exposure a real risk.

Manufacturers such as Nissan, Jaguar Land Rover, Mini and Stellantis operate production sites in the UK and could face reduced demand or higher costs if their exports lose EU incentives.

Industry reaction

Eden Motor Group CEO Graeme Potts argued that short‑term tariffs would likely be absorbed by Chinese manufacturers, who are focused on gaining a foothold in Europe rather than immediate profit. He sees little impact on retail sales volumes.

Carwow chief executive John Veichmanis warned that duties could push list prices higher or worsen finance rates, potentially unsettling the market. He stressed that affordable choice remains essential for the UK’s electric transition.

Next steps and EU pressure

Prime Minister Andy Burnham’s recent talks in Germany included a reminder from Chancellor Friedrich Merz that re‑joining the EU would be unlikely without UK tariffs on Chinese EVs, adding diplomatic weight to the policy debate.

What this means for dealers

Dealers should monitor government announcements closely, as any tariff introduction could increase wholesale costs for Chinese electric models and narrow profit margins. Adjusting pricing strategies and diversifying stock may become necessary.

Preparedness also means reviewing finance packages and marketing messages, ensuring customers understand any price changes while highlighting the value of UK‑built alternatives that may benefit from retained incentives.

Frequently asked questions

Will new tariffs increase the price of Chinese electric cars for UK customers?

Yes, a duty comparable to the EU’s 45 % rate would raise wholesale costs, which are likely to be passed on to retail prices. However, industry insiders suggest manufacturers may initially absorb part of the increase to maintain market share.

How could loss of the Made In Europe scheme affect British‑built car exports?

Without the scheme, UK‑made vehicles could be excluded from EU green subsidies, public‑contract incentives and fleet discounts, making them less attractive to European buyers and potentially reducing export volumes.

What should dealers do to prepare for possible tariff implementation?

Dealers ought to track policy developments, review their inventory mix, and consider expanding UK‑manufactured stock. Updating finance options and communicating price implications to customers will help manage uncertainty and protect margins.