How Trump’s Trade Policy Could Make EVs Cheaper in the UK
What do tariffs, protectionism, and politics have to do with the price of electric cars - especially for UKs drivers? Quite a lot actually. In summary, the prices of electric cars in the UK might fall, which is great news - it will make going electric cheaper, give drivers a greater choice of models, and speed up the UKs transition to more sustainable transport.
Donald Trump’s stance on tariffs and electric vehicles (EVs) could unexpectedly benefit UK consumers by lowering EV prices, according to Thom Groot, CEO of The Electric Car Scheme. Trump has threatened to impose tariffs on Chinese imports, which could divert EVs and batteries from China to the UK, making them more affordable.
Official White House Photo
The potential upside
While the US has already imposed heavy tariffs on Chinese-made EVs, the UK has avoided such measures. The EU, however, has introduced its own tariffs, which could cause Chinese EVs to shift focus to the UK market. This shift could ease the price barrier that many UK drivers face when considering an EV. Groot highlighted that 68% of their customers cite high prices as the main reason they haven't switched to electric cars yet.
Chinese-made EVs have already seen significant growth in the UK, with their market share increasing from under 2% in 2019 to 33.4% in the first half of 2023. Given that the UK is not enforcing tariffs like the EU, it’s becoming a more attractive export destination for Chinese manufacturers, which could lead to lower prices in the UK.
Zap Map (SMMT and DfT)
The numbers really paint a picture of how fast electric vehicles (EVs) are catching on. Pure electric cars now make up 22% of all new car sales in the UK, which lines up with the country’s new Zero Emission Vehicle (ZEV) mandate for 2024. It’s a huge shift from when EVs were a rare sight on British roads to becoming a popular choice for both private buyers and businesses. This percentage is only going to keep growing regardless of these latest developments, as manufacturers are now legally required to ramp up their EV sales each year leading up to 2035.
RAC Charge Watch
The challenges
However, there are potential hurdles. Chinese car companies might increase prices in the UK to offset losses from EU tariffs. Furthermore, domestic manufacturers in the UK could push for tariffs to protect their own market share if there is a sudden influx of cheaper Chinese EVs.
Thom Groot believes that while these trade shifts could lower EV prices in the short term, the UK government might refrain from imposing tariffs to avoid hindering its climate goals and increasing living costs. The government has already set ambitious zero-emission vehicle targets, which could be undermined by actions that raise prices and reduce EV adoption.
Overall, while Trump's trade policy might present challenges for global climate action, it could offer UK consumers a rare opportunity to access EVs that are even more affordable.
You can learn more about the growth of the UK EV market in this blog.
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