## Chinese Car Brands Capture Nearly 30% of the Electric Vehicle Market Share in the UK—The Driving Force Behind Automotive Industry Changes

The UK automotive market is experiencing significant upheaval. Data from the Society of Motor Manufacturers and Traders (SMMT) reveals that out of more than 470,000 electric vehicles sold last year, nearly 28% were manufactured in China. In addition to electric vehicles, imported cars from China overall have risen to account for 13.5% of total market sales—meaning that for every eight cars sold, one comes from this country.

### Chinese Car Brands Make Strong Breakthroughs

The expansion of Chinese cars in the UK is primarily driven by the excellent performance of BYD, Jaecoo, and Omoda, with total sales increasing by over 50% compared to the previous year. Notably, BYD has experienced a fivefold increase in sales in this market and is now set to become the world's leading electric vehicle retailer by 2025. MG—a symbol of the UK automotive industry—also now features products originating from China, owned by international investors. Additionally, Polestar (the Swedish electric vehicle brand) also manufactures in China, and some Tesla models are produced in Shanghai.

### Electric Vehicles Dominate the UK Market

Thanks to the growth of Chinese cars, electric vehicles now account for 23.4% of new car registrations last year, rising to 32.3% in the final month of the year. When combined with hybrid vehicles, nearly half of all new cars sold in the UK are now battery-powered. Plug-in hybrid vehicles are particularly the fastest-growing segment, with a 35% increase in sales, while fully electric vehicles also saw a 24% rise. Conversely, petrol and diesel cars declined by 8% and 15%, respectively.

Total new car sales in the UK last year increased by 3.5% to 2.02 million units, the highest since 2019. This recovery reflects the Labour government’s commitment to phase out new petrol and diesel cars entirely by 2030 and hybrid vehicles by 2035.

### Concerns Over Dependence on Imports

However, the rapid growth of Chinese cars has also raised concerns. Both the European Union and the United States have implemented restrictions, citing concerns over government subsidies and security risks. Estimates suggest that the Chinese government has invested at least $230 billion (approximately £170 billion) in the electric vehicle sector from 2009 to 2023. In response, the US has imposed a 100% tariff on imported electric vehicles from China, effectively banning them from the market, while the EU has also enforced high import tariffs. Conversely, the UK government currently states that it has no plans to impose tariffs on imported Chinese cars.

### Pressure from Legal Requirements

Another emerging challenge is that the pace of electric vehicle adoption has not yet met legal targets. Regulations for zero-emission vehicles aim for 28% of new sales to be electric by 2025, but the actual figure is only 23.4%—even lagging behind the 2024 target of 19.6% out of a goal of 22%. The situation will become more difficult as regulations are tightened, requiring one-third of all new vehicles to be electric.

### Manufacturers Face Economic Pressure

To meet these targets, automakers spent a total of £5.5 billion last year to support electric vehicle prices, averaging about £11,000 per vehicle. Companies that fail to meet the targets will face fines of £12,000 for each non-compliant vehicle sold. The SMMT argues that this level of expenditure is unsustainable and calls on the government to reconsider current requirements. Mike Hawes, CEO of the SMMT, pointed out that these regulations are pushing the industry beyond the actual needs of consumers. He proposed accelerating the review of regulations (scheduled for 2027) to be carried out this year.

Meanwhile, the European Union has postponed the ban on internal combustion engines from 2035 to 2040, but the UK remains committed to its original timetable.