Post-Brexit watchdog ‘prepared’ to probe influx of cheaper Chinese electric cars

The head of Britain’s post-Brexit trade watchdog has indicated readiness to follow Brussels in investigating Chinese companies flooding the electric car market. However, despite this preparedness, the government has yet to request such an inquiry.

Oliver Griffiths, CEO of the UK’s Trade Remedies Authority (TRA), responsible for advising the government on trade defence, affirmed their readiness while maintaining communication with ministers and close contact with the car industry. “We’ll be ready to act if approached,” he told the Guardian.

The European Commission initiated an anti-subsidy investigation into Chinese electric vehicles (EVs) last year, citing concerns about global markets being inundated with inexpensive imports from China. While Britain would have been covered by the EU’s inquiry as a member state, it now operates an independent trade policy post-Brexit. Under the current setup, the TRA can initiate investigations at the behest of ministers or industry to safeguard Britain’s economic interests.

However, Griffiths noted that neither the government nor carmakers have made such a request since Brussels launched its investigation in October. “We haven’t received any requests regarding electric vehicles,” he stated, though acknowledging keen interest from various stakeholders.

Chinese carmakers like BYD and Nio aspire to expand their presence in international markets, buoyed by substantial production growth in recent years and support from tax breaks, loans, and subsidies from Beijing.

China surpassed Japan as the world’s largest car exporter last year, with BYD, based in Shenzhen, outstripping Elon Musk’s Tesla as the leading electric carmaker. The EU estimates China’s share of EVs sold in Europe could reach 15% by 2025, while one-sixth of the UK market is expected to be dominated by Chinese firms by the end of the decade.

There are mounting concerns among some senior MPs regarding the future of the British car industry. Members of the inter-parliamentary alliance on China have warned of potential undercutting of British carmakers by Chinese companies, a sentiment echoed by trade policy experts who anticipate EU tariffs on Chinese EVs.

Griffiths cautioned against potential retaliatory measures from China should an investigation proceed, citing Beijing’s probe into alleged dumping of French brandy.

Both Labour and the Conservatives have expressed ambitions to bolster domestic EV manufacturing capacity. However, import protections are not universally welcomed in the EU, where German companies, often collaborating with Chinese firms or boasting significant sales in China, harbour reservations.

Several British carmakers have ties with China, including JLR, with a joint venture in the country. China’s investments in the UK, notably Envision AESC’s gigafactory in Sunderland supplying Nissan, further complicate the scenario.

Griffiths highlighted the complexity of the situation, where competing public policy goals intersect, emphasizing the potential benefits of cheaper Chinese imports in accelerating the transition to net zero.

A government spokesperson reiterated support for the auto industry, citing significant investments and collaborations aimed at fostering growth and innovation.

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