UK ministers consider tariffs on Chinese electric cars

UK ministers are reviewing duties on Chinese electric cars as the EU threatens to block the Made in Europe scheme, potentially raising dealer prices.

Key takeaways

• Ministers are considering tariffs on Chinese electric cars to address perceived subsidised dumping.
• Chinese EVs accounted for almost 25% of UK new‑car sales in September 2026.
• The EU may block UK access to its “Made in Europe” scheme without tariff action.
• Nissan and the SMMT warn that exclusion could damage UK exporters to the EU.

Government review of tariff options

Business Secretary Jonathan Reynolds is drawing up import‑duty options because Chinese electric cars are seen as state‑subsidised and being dumped into the UK market. The government has so far resisted EU and US measures, but pressure is mounting as Chinese brands grow.

The EU has linked tariff action to its Made in Europe programme, warning that the UK could become a gateway for Chinese vehicles into Europe if duties are not introduced.

Chinese EV market growth in the UK

Preliminary SMMT figures show that nearly a quarter of all new cars sold in September 2026 were from Chinese manufacturers. The rapid rise reflects strong demand for affordable electric models.

Five Chinese makes now rank among the 25 largest brands in Britain, and the Jaecoo 7 alone recorded almost 11,000 registrations in the month.

EU Made in Europe scheme and potential exclusion

The EU’s Made in Europe plan could restrict subsidies, tax incentives and public procurement benefits to vehicles built inside the bloc. The EU has warned the UK could be excluded from the scheme unless it acts on Chinese imports.

EU markets accounted for 58% of UK car exports in the first half of 2026, compared with roughly 4% to China, underscoring the importance of maintaining access.

Industry response

Nissan European chairman Massimiliano Messina warned the UK risked becoming a corridor for Chinese EVs into the EU and urged an adjustment of tariff policy. SMMT chief executive Mike Hawes echoed the warning, saying exclusion would hurt UK exporters.

Earlier concerns about Chinese retaliation against Jaguar Land Rover have eased as JLR’s sales in China fell to 62,400 units last year from a 2017 peak of 146,000.

What this means for dealers

If duties are imposed, the cost of importing Chinese electric vehicles will rise, likely increasing showroom prices and affecting profit margins for dealers holding such stock.

A loss of access to the EU’s Made in Europe scheme could reduce demand for UK‑built cars in Europe, putting pressure on manufacturers and dealers who rely on export volumes.

Frequently asked questions

Will new tariffs on Chinese electric cars increase prices for UK dealers?

Yes. Import duties add to the cost of bringing Chinese EVs into the UK, and dealers are likely to pass those costs to customers, meaning higher sale prices and potentially lower turnover for those models.

How could the EU Made in Europe scheme affect UK manufacturers if tariffs are not introduced?

The scheme could exclude UK‑built vehicles from preferential treatment, limiting access to EU public contracts and subsidies. That would reduce demand for British exports in the EU, damaging manufacturers that rely heavily on that market and affecting dealer supply chains.