Faisal Islam: Why the government is relaxed about Chinese car imports
In the heart of Somerset, near the sprawling site of Hinckley Point nuclear power station and the windswept hills of Glastonbury Tor, a transformative project is taking shape. This vast expanse of steel frames and machinery, covering an area equivalent to 30 football pitches, is poised to become the Agratas electric vehicle battery facility. Set for completion next year, it will serve as the UK’s largest gigafactory, producing battery cells to fuel Jaguar Land Rover’s electric vehicle line. For successive administrations, this £5bn investment by India’s Tata Group has symbolized a pivotal moment in industrial strategy, yet it remains a necessary step to sustain the domestic automotive sector.
The rise of Chinese car imports has recently shaken the industry, as data revealed that the Jaecoo 7—providing a compact SUV option—has claimed the top spot in the UK market for the first time. While the Jaecoo 7 is a mid-sized petrol or hybrid model, Chinese brands have dominated broader sectors, with one in seven new vehicles now being Chinese-made. By 2026, this figure has climbed to 15%, up from 1.3% five years prior. These figures came to light during a visit by Business Secretary Peter Kyle to the Agratas site, where a £380m grant was announced.
“I don’t want to prevent UK consumers from choosing the cars they prefer,” Kyle stated, emphasizing that the government aims to embrace the growing influence of Chinese automakers without hindrance.
Despite this openness, concerns linger about the impact on UK manufacturing. Over the past decade, car production in the country has dropped by half, raising questions about competitiveness and national security. Shadow business secretary Andrew Griffith argued that government policies steering consumers away from petrol and diesel engines have contributed to this decline, limiting natural market choices and inviting foreign EVs.
“British car makers have been undermined by a foolish ban on internal combustion engines, which has removed natural customer choice and drawn in imported EVs,” Griffith claimed.
Robert Jenrick of Reform UK echoed similar fears, stating that Chinese companies pose an unfair challenge. He warned that without intervention, domestic firms would struggle to keep up, suggesting tariffs and quotas as potential solutions. This sentiment aligns with actions taken by the EU and the US, which have already imposed trade barriers on Chinese imports. The UK’s decision not to follow suit has allowed Chinese manufacturers to expand their presence through increased dealer networks and targeted marketing efforts.
Canada and Spain have also adopted similar strategies, with Canada’s Prime Minister Mark Carney reducing tariffs on certain Chinese EVs and Spain embracing Chinese leadership in battery production. Mike Hawes, head of the Society of Motor Manufacturers and Traders (SMMT), noted that the UK’s historically open market has enabled rapid growth for Chinese firms. “The consumer is right,” he observed, “as they are receiving attractive products at competitive prices, featuring strong technology and reliable build quality.”
With Chinese companies preparing to outpace UK rivals in charging speed, Agratas asserts that its cutting-edge UK-based research will help bridge the gap in battery innovation. This facility is crucial for maintaining the country’s export capacity to the US, ensuring that Jaguar Land Rover can continue competing globally. Ultimately, the UK’s ability to adapt hinges on its capacity to innovate and match the momentum of foreign automakers.
