This is the first in a new series of regular insights by our industry and vehicle correspondent Andrew Charman – focusing on one of the week’s major headlines in the Business Motoring arena.
Electric vehicles are rarely out of the headlines these days and at present, those made in China are at the forefront of many of the stories – and not always for the right reasons.
National media has been rounding on suggestions that Chinese-made EVs could pose a security risk to the UK in terms of cyber espionage – they might include software that can spy on their occupants and surroundings, sending the information back to the Chinese state. Further claims argue that such vehicles could also be remotely controlled to cause chaos on UK roads.
There have even been reports that UK Ministry of Defence facilities compel staff owning Chinese-built cars to park at least two miles away from their place of work – none of which can be confirmed of course as Government agencies never comment on security matters.
Tariff fall-out
The simmering controversy took on a new aspect this week in the wake of the trade deal announced between the UK and the USA. While the deal was welcomed with great relief across a UK automotive industry that was facing the prospect of crippling tariffs of up to 27.5% imposed by President Trump, the details of the agreement were not disclosed, with only vague mentions of the small print being thrashed out in further negotiations.
On Monday 19th May The I newspaper published a double-page story stating that these negotiations for the trade deal are set to include President Trump pushing for a ban on the sale of Chinese-made electric vehicles in the UK – the paper quoted a White House source referring to strict security requirements around supply chains in the UK, Chinese EVs already effectively banned in the US.
If these suggestions are true – and no-one, in Government or among the EV manufacturers themselves, is making any comments on them – the implications could be huge for the UK automotive industry, car buyers and the Government’s net zero ambitions.
Chinese EVs are becoming highly familiar on UK roads for very good reasons. Today’s product is well-made and affordable, lowering the cost of switching for the growing numbers of UK drivers who want to go electric – especially in the Business Motoring market, where the benefit-in-kind tax advantages that come with running an EV make switching a no-brainer. It is of little surprise that close to 30,000 Chinese-made EVs found new owners in the UK in March alone.
Therefore to suddenly remove these choices from the market would be likely to seriously damage the Government’s avowed aims to go entirely electric by 2035 – even now the consumer appetite for switching is not where it needs to be, sales remaining stubbornly below the requirements of the Government’s Zero-Emissions Vehicle mandate, and removing Chinese cars from the equation would make the costs of buying an EV significantly higher. The net zero dream, which has already taken quite a battering in recent times, could be blown apart by a ban.
For the UK automotive retail industry the implications of a Chinese ban would be enormous. The raft of new manufacturers that have descended upon the UK market over the past couple of years have almost entirely pursued a plan of setting up traditional dealer networks, and gone about it in a most aggressive way – at least a couple of hundred new franchises have been added to dealer groups across the country and the pace shows no sign of slowing. Having made the substantial investments required, dealers would be devastated by having no cars to put in their new showrooms.
Euro cars, Chinese made
There is a further highly relevant consideration here too. While readers might consider that a ban would remove such new names as BYD, GWM, Omoda and Jaecoo from the UK market, what is not generally recognised is just how many electric cars from long-established Western manufacturers are today produced in China.
To give just a few examples – BMW makes the iX3 SUV at Shenyang, Swedish brand Volvo (now Chinese owned) builds several of its global models in the country and the latest MINI electric range is produced in China, though it is set to return to the UK in coming years. Citroën, Dacia, Smart, even the brand of President Trump’s favourite advisor Elon Musk, Tesla, build cars for global markets in China. Would they too be subject to the ban?
So the automotive industry, and in turn the UK Government, finds itself between a rock and a hard place – certainly it does not want the tariffs that President Trump has been threatening, but equally an end to the growing Chinese influence on UK automotive is not something anyone wants to consider either.
Of course it might not come to that – the Government has already secured some concessions in its negotiations with Trump’s administration, succeeding in retaining some ‘red lines’ such as not allowing US chlorinated chicken to be imported into the UK, so clearly there is much talking to be done.
All the time the deal hangs in the balance, however, all involved with UK automotive will remain worried, craving the one thing that presently looks a distant prospect – certainty.
