Faisal Islam: Why the government is relaxed about Chinese car imports
Amid the expansive landscape of Somerset, a site adjacent to Hinckley Point nuclear power station (currently under construction) and overlooking the windswept terrain of Glastonbury Tor holds the key to the British car industry’s future. This location, now a maze of towering steel structures spanning the equivalent of 30 football pitches, is set to transform into the Agratas electric vehicle battery plant—a £5bn venture spearheaded by India’s Tata Group. By 2025, this facility will become the UK’s largest gigafactory, producing battery cells that will power Jaguar Land Rover’s electric fleet. For several administrations, this investment has symbolized a success in industrial strategy, yet it also represents a critical benchmark for sustaining British automotive manufacturing.
Recent figures have shaken the sector, revealing that a Chinese-made Jaecoo 7 SUV, a mid-sized petrol or hybrid model, has topped UK car sales for the first time. Chinese brands now account for roughly 15% of new vehicles sold in 2026, up from 1.3% five years ago. This surge coincides with Business Secretary Peter Kyle’s visit to the Agratas site, where he confirmed a £380m grant to support the project. The minister emphasized that the UK should embrace the influx, stating,
“I don’t want to prevent UK consumers having access to cars of their choice.”
He framed the trend as an opportunity, citing potential job creation and investment, and likened it to Japan’s automotive industry in the 1990s.
Yet the sector faces mounting pressure. Over the last decade, UK car production has dropped by half, raising questions about domestic competitiveness. Critics argue that government policies, such as the phase-out of internal combustion engines, have inadvertently favored imported electric vehicles. Shadow business secretary Andrew Griffith accused regulators of stifling consumer options, claiming the ban on petrol and diesel cars “removed natural customer choice and attracted imported EVs.” Reform UK’s Robert Jenrick echoed similar concerns, warning of “unfair Chinese competition” and pledging tariffs and quotas if Beijing continues to undercut local producers.
The UK’s reluctance to impose tariffs contrasts with actions taken by the EU and the US, which have already targeted Chinese imports. This decision has allowed Chinese automakers to expand their dealer networks and marketing efforts, accelerating their market penetration. Canada, Spain, and other G7 nations have followed similar paths, with Spain actively welcoming Chinese EV manufacturing investments. Mike Hawes of the Society of Motor Manufacturers and Traders (SMMT) notes that the British market has always been open, but Chinese firms have capitalized on this by offering products that align with consumer demand—competitive pricing, advanced technology, and reliable construction.
The Agratas facility is positioned as a cornerstone of the UK’s response to this challenge. By advancing cutting-edge research in battery technology, it aims to keep pace with the rapid evolution of electric vehicles. Additionally, the plant ensures Jaguar Land Rover can continue exporting to the US, leveraging “made-in-the-UK” batteries to strengthen its global position. As Chinese companies demonstrate their ability to charge vehicles faster than filling a petrol tank, the UK’s gigafactory represents a strategic push to maintain relevance in the industry’s shifting landscape.
