The head of Britain’s post-Brexit watchdog said that it was ready to follow Brussels and launch an investigation into Chinese firms flooding the market with electric cars. However, the government had not requested it.
Oliver Griffiths, chief executive of UK’s Trade Remedies Authority, which advises on trade defense, said that the TRA was in constant communication with ministers. It also maintained close contact with the auto industry. In an interview with the Guardian, he said: “We will be ready to respond if someone comes to us.”
The European Commission began an investigation last year into Chinese electric cars (EVs), after warning of a “flood” of cheap imports coming from the second-largest economy in the world.
The inquiry would have covered Britain as a member, but it has pursued an independent trade strategy since leaving the EU in 2004. In the UK post-Brexit, ministers and industry can ask the TRA to investigate if import controls are necessary to protect Britain’s interests.
Griffiths stated that no requests from the government or automakers have been made since Brussels began its investigation in October. “We’ve never had these two things happen with electric vehicles. “I know that people are really watching this closely,” he said.
“We have been in regular and close contact with the industry regarding this issue, and many people are looking into the import numbers. I also know that the government is keeping a close eye on this issue. “All eyes will be on Brussels in the latter part of this year, when they may potentially introduce an interim measure regarding this.”
BYD, Nio and other Chinese automakers hope to be major players on the international market after an increase in production in recent years. Beijing has helped with tax breaks, loans, and other subsidies.
China has overtaken Japan to become the largest auto exporter in the world. Shenzhen’s BYD manufacturer, last quarter , surpassed Elon Musk ‘s Tesla for the top spot. China’s share in EVs sold to Europe is estimated to have reached 8%, and could reach 15% by 2025. AutoTrader predicts that one-sixth the UK market will be controlled by Chinese companies by the end.
Some senior backbench members are growing concerned about the future of British automobile industry. Last year, members of the UK’s inter-parliamentary China alliance – led by former Conservative Party leader Iain Duncan Smith with Labour peer Helena Kennedy as co-chairs – warned that the UK could “sleep walk” into a situation in which carmakers would be “undercutted to the point where they are extinction” by Chinese firms.
Last week , Sam Lowe, an expert in trade policy at Flint Global, and a former member of UK’s strategic advisory group for trade, said that he anticipated the EU would impose tariffs on Chinese electric vehicles this year.
He said that while the UK government and the industry were reluctant to copy the EU’s measures at the moment, they would change their minds once the cars from China originally intended for the EU began appearing in large numbers on British driveways.
Griffiths warned that an investigation of Chinese EVs might trigger retaliatory actions, pointing out that Beijing has launched an investigation over the alleged dumping by French brandy.
“If we did something in this area, there would be a danger that the country under investigation would respond. “I think that people are well aware of this,” he said.
The government has offered Tata (the Indian owner of Jaguar Land Rover) in £500m as subsidies for the construction of an electric car factory.
German companies, many of which have tie-ups or sales with Chinese firms, are uneasy about the idea of import protection.
China is a major investor in Britain. JLR has a joint-venture in China. China is also a major investor in the UK. This includes Chinese owned battery company Envision AESC which operates the UK’s one “gigafactory”, in Sunderland supplying Nissan and Geely which owns black-cab maker London Electric Vehicle Company.
Griffiths stated that the structure of the UK auto industry could affect whether import restrictions will help or hinder British companies, and suggested that cheap Chinese imports may benefit consumers as well as the push towards net zero.
“This is basically a consumer product that could be cheaper and that could really speed up the transition to net zero. “There are important equity issues on both sides,” said he.
We won’t comment on it until we are asked to do so. It’s an example of how different goals in public policy can be achieved within a single investigation.
A spokesperson for the government said: “UK auto manufacturers have not raised their concerns or requested an investigation regarding electric vehicle imports to China with the TRA.”
Tata has invested over £4bn in a new gigafactory, and Nissan is investing £2bn for an EV plant in Sunderland. These investments will create jobs across the country.