Workers assemble new energy vehicles at a smart factory of electric vehicle company Leapmotor in Jinhua, Zhejiang province, China, January 13, 2026.
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The UK broke with the US by opening its doors to China’s electric vehicle juggernaut.
Chinese electric vehicles only face a standard 10% import duty in Britain, one of the largest major overseas markets without additional China-specific tariffs. They are also missing in Japan and Norway.
This is in contrast to the US, where a 100 percent tariff virtually excludes Chinese electric vehicles. The European Union, Britain’s largest trading partner, is imposing manufacturer-specific tariffs of up to 35.3% on Chinese electric vehicles, on top of a standard 10% import duty on all foreign cars.
Now the UK faces a difficult decision as the EU’s proposals could force it to impose tariffs equal to those of the bloc.
Over the weekend, the Sunday Times reported that Britain’s Business Secretary Jonathan Reynolds is considering equalizing the EU levy on Chinese electric vehicles to avoid the pain of so-called “Made in Europe” proposals that could hurt domestic companies selling to the EU.
A British government spokesperson reiterated to CNBC that it has not imposed tariffs on Chinese electric vehicles, but added: “We continue to work closely with industry to ensure our approach reflects the national interests of the sector and the UK.”
The “Made in Europe” legislation, part of the EU’s Industrial Accelerator Act, aims to protect the bloc’s industries from unfair international competition by giving priority to goods made in Europe.
An EU official told the Financial Times in September that London needed to increase tariffs on Chinese electric vehicles and align more closely with EU trade policy to avoid “Made in Europe” hurdles.
The decision is balanced given Prime Minister Andy Burnham’s desire to reset relations with the EU, from which the UK officially left in 2020, and the likelihood that China will respond with retaliatory measures.
A spokesman for the Chinese embassy in London said it had expressed “serious concerns” to Britain about the reports of possible tariffs.
“China firmly rejects any discriminatory practice involving tariff increases or restrictive measures on Chinese products,” a spokesman said on Tuesday. “We will continue to monitor developments and respond accordingly,” they said.
Chinese car manufacturers quickly entered the market in the UK
Chinese car brands have quickly captured market share in the UK
An analysis by Jato Dynamics found that Chinese automakers’ registrations of both battery-electric and hybrid powertrains rose to 519,424 between early January and late August, increasing their overall market share to 28.1%. This is a significant increase from 12.9% in the same period in 2025.
Hybrid vehicles recorded the largest increase with 62,655 registrations compared to 32,565 battery-electric vehicles.
Andy Burnham, British Prime Minister, during a meeting with Emmanuel Macron, France’s President, at 10 Downing Street in London, Britain, on Thursday, September 3, 2026.
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“This is important for policy,” Paul Hilton, head of retail at Jato Dynamics, told CNBC by email.
“Tariffs targeting only battery electric vehicles made in China could slow some of the expansion, but would not take into account hybrid growth, vehicles made outside of China, or the underlying advantages in costs, product cadence and supply chains,” Hilton said.
“A sustained UK response should combine all evidence-based trade measures with incentives for local production, competitive energy and battery costs, charging infrastructure, skills and alignment with European market access rules.”
Takeover of the “Temu Range Rover”.
The best-selling car in the UK last month wasn’t a Tesla or Ford – but the Jaecoo 7 from China.
The mid-size SUV, nicknamed the Temu Range Rover, costs around £29,000 ($38,350) in the UK, compared to around £45,500 for a Land Rover Discovery Sport.
According to the Society of Motor Manufacturers and Traders, nationwide sales of the Jaecoo 7 rose to 10,814 in September, surpassing the Tesla Model 3, Ford Puma and Kia Sportage.
A Jaecoo 7 (J7) SUV in a showroom for Omoda and Jaecoo, brands of Chinese automaker Chery Automobile Co., in Gqeberha, South Africa, on Saturday, March 7, 2026.
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Rico Luman, senior sector economist for transport and logistics at ING, said the growing political divide between Britain and the EU left the UK with limited options beyond tariffs if it wanted to maintain a level playing field with the bloc.
Speaking to CNBC via email, Luman said exclusion from the Made in Europe initiative could have “significant consequences” for existing companies, making closer alignment with EU trade policy increasingly difficult to avoid.
“In general, it is quite remarkable that batteries from China are exempt from EU tariffs,” Luman said.
“At the same time, this is logical because production in Europe is not up to date and Europe lacks the rare earth minerals and refining capacity needed,” he added.