The United Kingdom, which had not imposed additional tariffs on Chinese electric vehicles, is considering levying high tariffs of up to 45.3%, a level similar to that of the European Union (EU).
According to The Times, the background behind the UK government's review of a policy shift is the rapidly growing influence of Chinese automakers in the UK automotive market.
From January to August of this year, the combined market share of five major Chinese automotive groups—including Geely, Chery, SAIC Motor, BYD, and Leapmotor—reached 19.7% in the UK new car market.
This is nearly four times higher than the 5% market share recorded in 2021.
During the same period, the market share of Chinese automakers in the EU market stood at 9.6%, meaning the UK's figure is double that of the EU.
Tariffs are cited as one of the factors creating the difference between the two markets.
Claiming that subsidies from the Chinese government could harm the European automotive industry, the EU has additionally imposed countervailing duties of up to 35.3% on Chinese electric vehicles starting in 2024.
Combined with existing tariffs, the total reaches up to 45.3%.
Meanwhile, the UK has maintained a baseline tariff of 10%.
Leveraging relatively low tariffs and price competitiveness, Chinese companies have rapidly increased the sales of electric and hybrid vehicles in the UK market.
In addition, pressure from the EU is adding to the UK's dilemma.
The EU is linking the issue of tariffs on Chinese electric vehicles with whether to include UK-made automobiles in its so-called Made in Europe policy, which favors products manufactured within the region.
This means that if the UK fails to erect trade barriers against Chinese electric vehicles on par with the EU, UK-built cars could face disadvantages in receiving subsidies or tax benefits in the European market.
The UK government finds itself at a crossroads as it must balance attracting investments from Chinese companies while maintaining the EU export competitiveness of its existing domestic automobile plants.
Similar concerns are emerging in South Korea, where sales of Chinese electric vehicles are rapidly growing.
In the first half of this year, the proportion of Chinese-made vehicles among newly registered electric cars in South Korea reached 35%. This figure includes not only Chinese brands like BYD, but also Tesla vehicles produced at Tesla's factory in Shanghai, China.
The domestic automotive industry warns that if price competition with Chinese electric vehicles intensifies, it could diminish the investment capacity for future cars by local finished-car manufacturers and auto parts suppliers. Consequently, the industry is calling for tax support for domestically produced electric vehicles and improvements to subsidy systems.
Reported by Kim Minjeong | Video by IYOO | Graphics by Lee Jeong-ju | Produced by SBS Digital News
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