The UK government says inclusion in the EU Made in Europe programme could boost the automotive sector, but may require tariffs on Chinese electric cars.

Government officials said Britain could join the EU Made in Europe scheme, giving UK manufacturers access to European contracts, but the move is likely to be conditioned on imposing duties on Chinese electric vehicles, a development that could reshape dealer pricing and inventory decisions.

government briefing on the EU Made in Europe scheme and its impact on UK car manufacturers

Key takeaways

France and Germany have proposed UK inclusion in the Made in Europe scheme.
Entry may require the UK to mirror EU tariffs on Chinese EVs.
Chinese electric cars made up about 25% of UK sales in September.
Around 60% of UK‑built vehicles are exported to the EU.

EU proposals for UK participation

France and Germany have put forward proposals that allow Britain to join the EU’s Made in Europe scheme, which would let manufacturers that build in the UK access lucrative European public contracts.

The government said it would welcome the objective to have the UK included in the Industrial Accelerator Act, a statement made by a No 10 spokesperson in October 2026.

Tariff conditions and Chinese electric vehicles

The scheme is intended to protect clean‑technology and EV manufacturers from cheap Chinese competition. The EU already imposes roughly 45% duties on Chinese electric cars entering its market.

UK officials indicate that any UK entry could require similar tariffs, but Trade Secretary Jonathan Reynolds has said no immediate tariff action is planned and that decisions will be based on the UK’s own interest.

Impact on UK manufacturers and export markets

Approximately 60% of vehicles built in the UK are currently exported to the EU. Exclusion from the scheme could mean loss of subsidies, eligibility for public contracts and fleet‑incentive benefits that favour EU‑made cars.

Manufacturers such as Nissan, Jaguar Land Rover, Mini and Stellantis, which all produce cars and vans in the UK, would face varying degrees of pressure if tariffs are imposed or if they lose access to the European green‑policy incentives.

What this means for dealers

Dealers should watch for any tariff announcements, as higher duties on Chinese EVs could raise wholesale prices and alter the competitive balance between imported and domestically built models.

If the UK is excluded from the Made in Europe scheme, demand for UK‑built cars in European fleets may fall, potentially reducing stock turnover and prompting dealers to adjust pricing and sourcing strategies.

Frequently asked questions

Will the UK have to impose tariffs on Chinese electric cars to join the scheme?

The EU’s Made in Europe programme is linked to protecting its market from cheap Chinese EVs. While officials say tariffs could be a condition for UK participation, the Trade Secretary has stated there are no immediate plans and any decision will be based on the UK’s own trade policy.

How could exclusion from the Made in Europe scheme affect dealer inventories?

Without access to the scheme, UK‑built vehicles may lose eligibility for European public contracts and fleet incentives, reducing demand from EU buyers. Dealers could see slower turnover of British‑made stock and may need to reconsider pricing or increase reliance on imported models to maintain profitability.