The United Kingdom is considering investigating Chinese state subsidies to electric vehicle (EV) manufacturers, according to Politico.
The UK investigation will follow the launch of a similar EU enquiry last October, which caused discontent in Beijing, with critics warning it could drive up the price of more environmentally friendly cars at a time of climate emergency and cost-of-living crisis.
Now British carmakers are calling on the UK government to expedite its work. Manufacturers fear the country will see a surge of Chinese-made electric cars diverted to its market from the EU if the bloc imposes duties on imports when its probe concludes later this year.
UK Trade Secretary Kemi Badenoch is preparing to instruct the UK’s trade watchdog, the Trade Remedies Authority (TRA), to launch an investigation as UK manufacturers “are worried about putting their heads above the parapet” by filing a complaint themselves. A spokesperson for the Department for Business and Trade stated:
“No request for an investigation has been made to DBT, but car manufacturers should formally raise any concerns with the Trade Remedies Authority before one is considered.”
If the EU finds a clear case of unfair subsidies, it will be very difficult for the UK government to object. The European Commission’s investigation is expected to conclude in the second half of this year following the European Parliament elections in June.
Mike Hawes, chief executive of the British automotive lobby the SMMT, stated that “you could see an influx” of electric cars into the UK as Chinese manufacturers seek to increase their market share amid a faltering economy. Alex Boyd, a former trade and economic adviser and now director at the consultancy Strand Partners, claimed:
There’s a key political tension between how we green our economies with all these wonderful new technologies, but at the same time does that mean the decimation of your manufacturing base for lack of competitiveness?
Meanwhile, the UK is keen to support its own electric car industry. Last year, the British government allocated £2bn to support investment in electric car and battery manufacturing by companies such as Jaguar Land Rover, Nissan and BMW.
However, any trade dispute could expose British exporters to the wrath of Beijing. Previously, China retaliated against Paris, a key supporter of the EU investigation, by launching an anti-dumping enquiry into imports of French brandy in early 2024.
“They’re still exploring what they could potentially do. But they’ve probably only got the space of a couple of months to make that decision.”
