Chinese car manufacturers are poised to make a notable impact on the UK car market in the coming years, offering a wave of more affordable electric vehicles (EVs) that could challenge established European brands.
According to the 2023 FN50 leasing companies’ survey, industry leaders were optimistic about these new entrants gaining market share from higher-priced European rivals.
However, this outlook could shift dramatically if the UK Government imposes stringent import tariffs on Chinese-built vehicles—a measure already adopted by the United States and European Union to protect legacy carmakers in their regions.
EU Leads the Way with Tariffs
The European Commission’s investigation revealed that Chinese car brands have benefited from unfair government subsidies in Beijing, enabling them to keep prices artificially low. As a result, the EU has implemented tariffs of up to 45% on new EVs imported from China for the next five years.
China, which has been targeting an aggressive expansion into the European market to bolster its growing automotive sector, may need to rethink its strategy if these tariffs stifle sales. One possible outcome could see China redirect its focus toward the UK market, especially since the UK Government has yet to clarify its stance on similar tariffs.
In October, British trade minister Jonathan Reynolds stated that no complaints had been raised by UK businesses regarding Chinese EV imports, suggesting the UK was not immediately following the EU or US example.
Impact on the UK Fleet Market
The arrival of Chinese carmakers in the UK is expected to significantly influence the EV sector, according to Ian Turner, chief sales officer at Alphabet.
“The entrance of new Chinese OEMs into the UK market will undoubtedly reshape the fleet landscape, particularly in the EV segment,” he says. “Their focus on affordability is likely to intensify competition and disrupt traditional market dynamics.”
Turner highlights the potential benefits of this competition: “Chinese manufacturers excel at producing cost-effective vehicles, which could drive down prices and make EVs more accessible to a broader audience. This affordability might accelerate the transition to electrification, benefiting corporate fleets and retail customers alike.”
However, he also acknowledges the challenges: “The possible introduction of import tariffs could alter cost structures and impact fleet decision-making, requiring careful planning around pricing strategies.”
Strategic Shifts by Chinese Manufacturers
In response to EU tariffs, some Chinese carmakers are already adapting their business strategies. BYD, for example, has announced plans to establish a European production facility to mitigate tariff costs.
Additionally, Chinese OEMs have been forging strategic partnerships with European carmakers, complicating how tariffs might apply. Stellantis, for instance, has invested £1.3 billion to acquire a 20% stake in Leapmotor and launched Leapmotor International, a joint venture focused on exporting, selling, and manufacturing Leapmotor products outside China, starting with Europe.
Aftersales Support Remains a Concern
Despite the growing interest in Chinese EVs, UK leasing companies remain wary about the long-term reliability of these brands, particularly regarding aftersales services.
Rory Mackinnon, Holman’s commercial director, explains: “The entry of Chinese OEMs broadens fleet options, especially in the EV space. However, many of these manufacturers lack robust aftersales networks or reliable parts supply. These factors must be carefully considered when evaluating vehicle acquisitions.”
Concerns are heightened by the experience with Fisker, an American newcomer that entered the UK market with promise but filed for bankruptcy in 2024. With limited aftersales infrastructure in place, Fisker owners now face significant maintenance challenges and no warranty support—serving as a cautionary tale for fleets considering less-established brands.
