Faisal Islam: Why the government is relaxed about Chinese car imports

Faisal Islam: Why the government is relaxed about Chinese car imports

Nestled in a Somerset field, the Agratas electric vehicle battery plant stands as a pivotal site for the UK’s automotive future. With the Hinckly Point nuclear power station—still under construction—visible in one direction and the windswept slopes of Glastonbury Tor in the other, this sprawling complex of steel frames, cranes, and drainage channels is set to become the nation’s largest gigafactory. By 2027, it will produce battery cells for Jaguar Land Rover’s electric vehicle range, positioning the UK to compete in a rapidly evolving global market.

Yet the rise of Chinese car imports has raised questions about the sector’s resilience. This week, data revealed that the Jaecoo 7—a mid-sized petrol or hybrid SUV—has surpassed all UK-made models for the first time. Chinese brands now account for roughly 15% of new car sales in 2026, a sharp increase from 1.3% five years ago. This shift has sparked debates over whether domestic manufacturers can keep pace, as well as concerns about trade imbalances and national security.

Government optimism amid pressure

Business Secretary Peter Kyle recently visited the Agratas site to announce a £380m grant, underscoring the government’s confidence in the project. When asked about the surge in Chinese vehicles, Kyle emphasized that “Britain should not fear” the trend. “I don’t want to restrict UK consumers from choosing the cars they prefer,” he stated. Instead, he framed the situation as an opportunity to attract investment and create jobs, drawing parallels to Japan’s 1990s car industry boom.

“If the conditions are right, I would absolutely welcome [Chinese investment],” Kyle told me.

However, the UK’s car production has dwindled by half in the last decade, raising doubts about its ability to retain market share. Critics argue that weak domestic competitiveness and lax regulatory policies have allowed Chinese firms to dominate. Shadow business secretary Andrew Griffith accused the government of “foolish” measures that pushed consumers toward electric vehicles, stating that “British car makers have been undermined” by these decisions.

“British car makers have been undermined by a foolish ban on internal combustion engines,” Griffith said.

Meanwhile, Reform UK’s Robert Jenrick highlighted the threat of “unfair Chinese competition,” warning that without intervention, jobs could be lost. “If Beijing continues to cheat, Reform UK will introduce tariffs and quotas,” he claimed. This sentiment reflects broader tensions, as the EU and the US have already implemented levies on Chinese imports. The UK’s decision not to follow suit has accelerated the growth of Chinese brands, aided by their investments in dealer networks and aggressive marketing.

Mike Hawes of the Society of Motor Manufacturers and Traders (SMMT) acknowledged the sector’s openness but noted that Chinese firms are capitalizing on demand. “At the end of the day, the consumer is right,” he observed. “They’re offering attractive products at competitive prices, with strong technology and quality.” The challenge now lies in whether the UK can match this momentum through innovation, as Agratas aims to do with its cutting-edge research on battery technology.