UK Caught Between EU Buy-European Push and Chinese EV Surge

The UK auto industry faces a difficult choice between Europe and China. While the European Union is putting in place a system to prioritize locally produced goods in public procurement, Chinese brands are gaining ground in the UK new-car market. The UK government is seeking both to maintain exports to the European market and to attract investment from China.

According to reporting by Huxiu’s Auto Business Review, the clash stems from a divergence between EU industrial policy and UK trade policy. On September 21, 2026, en route to the UN General Assembly, UK Prime Minister Andy Burnham said the UK wants to be a reliable partner for the EU.

“We are not your enemies.”

Four days after those remarks, Reuters, citing a Financial Times report, said the EU is pressing the UK to raise import tariffs on Chinese cars. The EU is reportedly urging the UK to align with its trade policy so that key British exports are not hit by European-made requirements.

Details and Aims of the EU Industrial

Accelerator Act At the center of the dispute is the EU’s proposed Industrial Accelerator Act. Its formal name is the Industrial Accelerator Act, abbreviated as IAA. It aims to boost demand for EU-made products by setting European-made and low-carbon requirements for public procurement and public support in sectors such as autos, steel and batteries.

EU public procurement exceeds 2 trillion euros a year, accounting for about 14% of the bloc’s economy. The IAA would use part of that spending to expand production within the bloc and reduce dependence on outside suppliers. The UK fears its products could be shut out of some support measures.

On September 22, Prime Minister Burnham met European Commission President Ursula von der Leyen in New York. According to a UK government statement, they discussed a UK-EU summit later this year and a joint response to unfair competition and overcapacity in global markets. No specific agreement on the European-made issue was disclosed.

Prime Minister Burnham said the UK’s request for participation has broad support among member states. France’s industry minister, meanwhile, said that having left the EU, the UK cannot expect the same rights as member states. The UK position and the EU’s principled stance remain at odds.

Chinese Brands Expand Rapidly in UK Market

Chinese brands have already made marked inroads in the UK market. Chinese brands account for more than 15% of the UK new-car market. According to UK auto media reports, Chinese brands including SAIC-owned MG registered about 223,000 new vehicles in the UK from January to August 2026. BYD and Chery’s overseas sub-brand Jaecoo and others are growing sales.

Their sales networks are also expanding fast. According to data compiled by Autotrader, the UK automotive marketplace, the number of UK outlets handling Chinese-brand vehicles rose from 95 in May 2024 to 440 in May 2026. That is about 4.6 times larger in two years.

BYD started selling passenger cars in the UK in March 2023, and cumulative new registrations topped 100,000 by July 2026. Its lineup has expanded from one model at launch to 10, covering both battery-electric and plug-in hybrid vehicles. Its retail network has also grown to 143 outlets.

MG’s history is unusual. The British-born brand was acquired by Nanjing Automobile in 2005 and came under SAIC in 2007 through its merger with SAIC. It is now re-expanding in the UK market as a brand under the Chinese auto group. According to published materials, MG’s UK new-car registrations from January to August 2026 exceeded 60,000, up 19.8% year on year. In the Society of Motor Manufacturers and Traders’ model rankings for the same period, the MG HS ranked sixth and the Jaecoo 7 ranked third.

Status of Partnership Talks on UK Local Production

Chery is expanding beyond sales. In August 2026, the company announced it would open an R&D base at UTAC Millbrook in Bedfordshire. The site is a vehicle testing and development facility operated in the UK by automotive testing and certification body UTAC, equipped with test tracks and battery and other testing facilities.

Chery plans to open the base in late autumn, initially focusing on chassis and driver-assistance systems adapted to UK driving conditions. It is said to plan to later expand into autonomous driving and artificial intelligence. The move is seen as localizing development functions, not just imports.

Production partnerships are also advancing. In June, Chery signed a non-binding agreement with Nissan to explore producing Chery passenger cars for the UK market using Nissan’s Sunderland plant. As of mid-September, the project was still under evaluation, with specific models and production volumes undecided. If realized, Chery could produce locally using an existing plant, while Nissan could expect higher utilization.

Geely-linked assets are also rooted in the UK. LEVC, under Geely Holding Group, builds taxis near Coventry, while Lotus has a production base in Norfolk. The group also has design and R&D functions in Coventry. LEVC disclosed in 2024 that cumulative investment by Geely since 2014 had exceeded 1 billion pounds.

Geely Auto has also begun developing the UK market under the Geely brand. Its first model was launched in the UK in October 2025, and monthly registrations topped 1,000 for the first time in March 2026. The company said in April it had signed contracts with about 80 dealers and plans to increase sales and service outlets to 100 by year-end.

Leapmotor entered the UK through the Stellantis Group. Stellantis, a multinational automaker created in 2021 by the merger of Fiat Chrysler and Groupe PSA, holds about a 21% stake in Leapmotor. The two established Leapmotor International, owned 51% by Stellantis and 49% by Leapmotor, to handle sales and manufacturing of Leapmotor products outside Greater China. Through the joint venture, Leapmotor can use Stellantis’s overseas sales channels and operational resources. According to Leapmotor UK materials, UK new registrations reached 6,770 in the first half of 2026, with cumulative registrations since entering the UK in March 2025 exceeding 11,000.

EU Pressure for Higher Tariffs on China

The European-side barrier facing UK-made products lies in high export dependence. Even after Brexit, UK-EU auto supply chains remain closely linked, with bilateral auto trade totaling about 80 billion euros a year. Most UK vehicle production is for export, and the EU is its largest export market. On September 22, the Society of Motor Manufacturers and Traders published findings from research commissioned from Oxford Economics.

EU officials have said that if the UK raises tariffs on China and moves closer to EU trade policy, it would help avoid key exports being hit by European-made restrictions. The UK currently applies only the 10% most-favored-nation tariff, without the additional anti-subsidy duties imposed by the EU. The EU is wary of Chinese cars circumventing tariffs via the UK.

The EU’s concerns go beyond circumvention. It is also watching for routes by which Chinese cars could gain local-production status in the UK, allowing parts and finished vehicles to flow into the EU market. If the IAA favors EU-made production in public procurement and subsidies, rules on origin and supply chains will shape the competitive terms for UK exports. For the UK, tariff policy is both a trade issue and a determinant of production location.

UK Government and Nissan Seek Difficult Balance

The UK government is weighing the costs and benefits and taking a cautious stance. The business secretary stressed that protective measures could invite retaliation, and expressed a desire to attract Chinese EV investment following the approach used to court Japanese firms in the 1980s. The view is that foreign investment is essential to sustain jobs and supply chains.

Nissan’s moves highlight the internal contradiction. While calling for higher tariffs to protect its Sunderland plant, the company is also pursuing contract-manufacturing talks with Chery. Outside work would help maintain plant utilization, but sits uneasily with calls to protect domestic industry. The survival of its UK plant and the use of a Chinese company intersect at the same factory.

UK auto policy toward China affects not only importers but also plants, parts suppliers and European auto groups themselves. Companies growing sales through finished-vehicle imports, companies investing in R&D, companies that already hold production assets, and companies discussing production partnerships with local firms all coexist. Raising tariffs would affect consumer prices and investment decisions, while leaving them unchanged would leave friction with the EU. The UK government is seeking both to attract Chinese investment and to maintain access to the European market.

Editorial Opinion

On short-term impact: over the next three to six months, talks on the scope of the IAA and the treatment of the UK are expected to be the focus of trade negotiations. If the UK revises tariffs on China, it would directly affect import prices and dealer-network plans. Companies are expected to rush to confirm rules of origin and procurement requirements. The Chery-Nissan talks over the Sunderland plant will also draw attention for their effects on utilization and employment.

From a longer-term perspective, production locations and supply chains could be reorganized over one to three years. If localization of R&D bases advances, development capacity for chassis tuning and driver assistance will accumulate in the UK. If European-made requirements tighten, however, local sourcing of batteries and parts within the region will become a competitive factor. The role of UK plants will change depending on access to export markets.

As a question from the editors, whether tariffs and investment promotion can be reconciled remains open. Protecting domestic plants and welcoming foreign capital to raise utilization can conflict. The question is which to prioritize: consumer choice and prices, job retention, or supply-chain autonomy. The treatment of origin and the scope of technology transfer also need scrutiny.

References

• “ 英国汽车的中国难题 “, by 汽车商业评论 — 虎嗅网, 2026-09-25T23:20:45.000Z (ARR)
• Source URL: https://www.huxiu.com/article/4893991.html?f=rss