Faisal Islam: Why the government is relaxed about Chinese car imports
Faisal Islam: Why the government is relaxed about Chinese car imports
Amid the rolling hills of Somerset, where the horizon stretches toward Hinckley Point nuclear power station and the windswept slopes of Glastonbury Tor, a critical turning point for the UK’s automotive sector is emerging. The site, currently a sprawling network of steel structures spanning 30 football pitches, is set to become the Agratas electric vehicle battery plant—a UK gigafactory poised to fuel Jaguar Land Rover’s shift to electric mobility. This £5bn investment from India’s Tata Group has been hailed as a success by successive governments, yet it also represents a last-ditch effort to sustain domestic manufacturing amid a global automotive upheaval.
Recent data has shaken the industry, revealing the Jaecoo 7—a hybrid SUV from China—has claimed the top spot in UK car sales for the first time. While this model is not the only example, the broader trend shows Chinese-owned brands now account for roughly 15% of new car registrations in 2026, up from 1.3% five years ago. The same week Business Secretary Peter Kyle visited the Agratas site to approve a £380m grant, the data underscored a growing reliance on foreign competition. When asked about the implications, Kyle emphasized that the government sees no reason to worry. “Britain should not fear the rise of Chinese imports,” he stated. “I don’t want to limit UK consumers’ access to vehicles they prefer.”
“I would absolutely welcome Chinese investment if the conditions are right,” Kyle added, framing it as an opportunity rather than a threat. He drew parallels to Japan’s 1990s automotive boom, highlighting how foreign engagement can drive job creation and technological growth.
Yet the UK’s car production has dropped by half in the last decade, raising concerns about domestic competitiveness. Shadow business secretary Andrew Griffith accused policies steering consumers away from petrol and diesel of stifling growth. “British carmakers were undermined by an unnecessary ban on internal combustion engines,” he argued. “This removed choice and opened the door to imported EVs.” Reform UK’s Robert Jenrick echoed similar fears, calling Chinese competition “unfair” and warning of potential job losses unless tariffs and quotas are introduced.
While the EU and US have already levied tariffs on Chinese imports, the UK’s decision not to follow suit has accelerated the influx of foreign vehicles. Chinese companies have capitalized on this openness, expanding dealer networks and marketing efforts to boost sales. Canada and Spain have taken comparable steps, with the latter embracing Chinese leadership in EV production to attract substantial investment. Mike Hawes, head of the Society of Motor Manufacturers and Traders (SMMT), acknowledged the UK’s traditionally open market as a factor. “Chinese firms are moving quickly,” he noted, “but ultimately, the consumer is right. They’re delivering competitive products with strong technology and reliable quality.”
The Agratas facility’s significance lies in its ability to bridge the gap. As Chinese automakers race to introduce faster-charging batteries, Agratas aims to leverage UK-based innovation to stay ahead. By producing cutting-edge cells for Jaguar Land Rover, the site will help maintain export capabilities to the US, a key market for British automotive brands. The challenge remains: can the UK adapt its strategy to retain its foothold in an increasingly globalized industry?
