Faisal Islam: Why the government is relaxed about Chinese car imports
Faisal Islam: Why the government is relaxed about Chinese car imports
Amidst the rolling hills of Somerset, a site near Hinckley Point nuclear power station and the windswept expanse of Glastonbury Tor has become a focal point for the UK’s automotive future. This is where the Agratas electric vehicle battery facility will soon take shape, destined to become the country’s largest gigafactory. From 2027, it will manufacture battery cells to fuel Jaguar Land Rover’s electric vehicle lineup. Yet, this development occurs against a backdrop of growing Chinese influence in the UK car market, where the Jaecoo 7, a midsize petrol or hybrid SUV, has recently claimed the top-selling car title for the first time.
Government officials see this as a strategic win, with the £5bn investment from India’s Tata Group hailed as a success in industrial policy. However, it also represents a necessary step to sustain British car manufacturing. The sector now faces a pivotal test, as data reveals that Chinese-owned brands have captured 15% of UK new car sales so far in 2026—up from 1.3% five years ago. This surge has sparked debate over whether domestic producers can keep up, as well as concerns about data security and competitive fairness.
Policy and Perception
Business Secretary Peter Kyle recently visited the Agratas site to secure a £380m grant, underscoring the government’s confidence in the project. When asked about the influx of Chinese imports, he emphasized that the UK should embrace the trend. “I don’t want to restrict consumer choice,” he stated. His focus remains on fostering opportunities for employment and investment, likening the situation to Japan’s car industry in the 1990s.
“If the conditions are right, I would absolutely welcome [Chinese investment],” Kyle said.
Yet, not all agree. Shadow business secretary Andrew Griffith MP criticized the decline in domestic production, attributing it to government regulations pushing away petrol and diesel vehicles. “The ban on internal combustion engines has eroded natural customer choice and flooded the market with imported EVs,” he argued. Reform UK’s Robert Jenrick echoed similar concerns, warning of “unfair Chinese competition” and hinting at potential tariffs to shield jobs.
Meanwhile, the UK’s approach to tariffs has allowed Chinese imports to flourish. Unlike the EU and the US, which have imposed levies, the UK has opted for a more open strategy. This has enabled Chinese automakers to expand their dealer networks and marketing efforts, accelerating sales growth. Other G7 nations, such as Canada and Spain, have followed suit, with Canada easing tariffs on certain electric vehicles and Spain welcoming Chinese manufacturing investments.
Consumer Demand and Competition
Mike Hawes, head of the Society of Motor Manufacturers and Traders (SMMT), acknowledges the UK’s traditionally open car market. “Chinese firms are moving swiftly,” he noted. But he also highlights the appeal of their offerings: competitive pricing, advanced technology, and reliable build quality. “At the end of the day, the consumer is right,” he said.
The Agratas facility’s role in this competition is critical. As Chinese companies race to deliver faster charging times than traditional fuel stations, Agratas aims to match their innovation through UK-based research. This ensures Jaguar Land Rover can continue exporting to the US, with batteries made domestically, reinforcing the country’s position in the global EV race.