Chinese electric vehicle (EV) manufacturers, headed up by BYD, are storming the gates and taking over the global automotive market. As the strongest player in its home market of China, BYD’s goal is to replicate that British market over the next 10 years. Yet, geopolitical tensions and protective tariffs implemented by Western nations present a growing obstacle to their ambitions. Further, current market dynamics are shifting, and attitudes towards Chinese technology are changing. This uncertainty continues to cast doubt on the future of Chinese EVs in international markets.
BYD has reigned as a tsunami in the EV industry. Steve Beattie, BYD UK’s sales and marketing director, is a man with a mission. His aspirations for the company are to be the UK’s number one EV brand in the next decade. This goal seems to support China’s stated aim of becoming a world leader in high-tech industries. Specifically, it zeroes in on electric vehicles as one element of the initiative, “Made in China 2025,” that the Communist Party adopted in 2015.
China’s automotive industry has experienced unprecedented expansion since the country entered the World Trade Organization (WTO) in 2001. According to informally reported analysis by UBS, BYD lowered per vehicle production costs by significant amounts. In reality, their prices are 25% less than their Western rivals. This cost advantage puts BYD in an excellent place in an ever more competitive field.
Recent geopolitical developments complicate this landscape. As it stands, the Biden administration intends to increase these import tariffs on Chinese-made EVs to 100% in 2024. This development responds directly to intensifying calls for action on national security and economic competition grounds. In like manner, the European Union placed high tariffs of up to 35.3% on Chinese-made EVs in October 2024. These tariffs would be a huge blow to BYD’s competitive position and ability to further penetrate both Europe and the UK market.
Chinese brands have made exceptional advances in global sales. According to Rho Motion, Chinese manufacturers accounted for 10% of global EV and plug-in hybrid sales outside their home country. The emergence of models like the BYD Dolphin Surf, priced at approximately £18,000 in the UK, demonstrates the competitive pricing strategy employed by Chinese automakers.
The issue is compounded by the clamor around Chinese technology and security threats. A spokesperson for the Chinese embassy in London equally categorically denied the allegations of security risks associated with Chinese EVs. They dismissed these claims as “entirely unfounded and absurd.” They emphasized that “China has consistently advocated the secure, open, and rules-based development of global supply chains,” asserting that there is “no credible evidence” to support security claims against Chinese EVs.
We brought in a few industry experts to give their perspective on these perceptions. As Dan Caesar recently reported, most consumer products—including cars manufactured in Germany—have parts that come from China. He argued that fears regarding Chinese technology are often exaggerated: “The reality is most of us have smartphones and things from China, from the US, from Korea, without really giving it a second thought.”
Brian Gu, the vice chairman of Xpeng, expressed pride in their ability to thrive in an increasingly cutthroat EV market. Even under these hostile external pressures, the desire to grow still exists within them. He further deemed the tariffs “naked protectionism.” This reveals the reality of the impenetrable gauntlet Chinese manufacturers must run to become truly globally competitive.
Joseph Jarnecki, a research fellow focusing on the international competitiveness of The Royal United Services Institute, agreed that Chinese carmakers have to operate under local laws that increasingly include national security elements. More importantly, they are keen to risk being branded a security threat, since this would greatly damage their global expansion potential. He asserted that “it will be necessary to use Chinese-supplied technology” as the industry evolves.
Even the talking point that Chinese vehicles are inferior has changed. Dan Caesar remarked on the high standards of Chinese cars today, stating that “China has learned extremely quickly how to manufacture cars.”
As these national supply chain dynamics play out, companies like Chery are already starting to play for keeps. They are launching their Omoda and Jaecoo sub-brands into the UK market. With Oliver Lowe acting as the UK product manager for both Omoda and Jaecoo, the competitive landscape is further enriched.