What's driving the surge of Chinese brands' footprint in the UK?

CGTN Europe

CGTN Europe interviewed Daniel Harrison, Automotive analyst, Ultima Media

Transcript

00:00Now, Britain's lack of tariffs on Chinese cars helped drive up sales last month,

00:05while in 10 cars sold in the UK in June were made in China.

00:10Around 19,000 cars made by Chinese-owned brands were sold last month,

00:15making up 10% of overall sales.

00:19That's up from 6% in the same month a year ago.

00:22Now, sales of new brands from China, such as BYD, JQ and Omoda, are growing rapidly.

00:28Joining more established Chinese-made brands like MG and Polestar.

00:34Daniel Harrison is an automotive analyst at Ultima Media, and he joins us now.

00:38Thank you so much, Daniel. Good to see you.

00:40So, BYD, Omoda, JQ, they've made a dramatic entrance into the market this year.

00:45What's driving their rapid success in Britain?

00:49Is it just about the absence of tariffs?

00:53It's mainly the tariffs.

00:54The fact that, you know, the UK doesn't apply import tariffs, unlike the European Union,

01:00which imposes tariffs between 17% and 35%, depending on the car brand.

01:05But it's also about the zero-emissions vehicle mandate that the UK has,

01:11which compels manufacturers to, I think, for 2025,

01:16to produce or sell 28% of vehicles that are zero-emissions.

01:20So, they get heavily fined if they don't meet that mandate.

01:24So, in essence, manufacturers are deliberately keeping prices artificially low to meet that mandate

01:31and to avoid those heavy fines.

01:33And how are the legacy European and Japanese brands responding to pressures from Chinese competitors?

01:41With difficulty is the simple answer.

01:43Their cost base is significantly higher than the Chinese imports.

01:49So, what they're tending to try and do is to either develop joint ventures with Chinese operations

01:56and actually import them back to Europe, believe it or not.

02:00So, in many cases, they're trying to establish these partnerships with lower-cost brands

02:06and transfer the technology and achieve those lower vehicle prices

02:11to try and compete with the Chinese brands.

02:14So, one in four new cars sold in June were electric in Britain.

02:19So, EV sales are up 39%.

02:22But private demand is described as being subdued.

02:26I mean, comparatively, how well is the UK doing with its switch to electric cars

02:30and what might be getting in the way?

02:34Lots of interesting questions there.

02:36I'll try and do it quickly.

02:38So, within the context, overall UK sales are down because of the decline in petrol and diesel.

02:44So, relatively speaking, yes, EV sales are increasing as a share of that percentage.

02:50I mean, they're still increasing, but not quite as fast as the zero-emission vehicle mandate requires

02:55and the ultimate goal of zero emissions by 2035.

03:01The challenges are legion.

03:03You have prices being prohibitively high.

03:07Consumers are very reluctant to spend 20%, 30% more on an electric vehicle

03:11than a comparative ICE vehicle.

03:13The charging infrastructure, we know that.

03:15The range anxiety, we're all there.

03:17And what's now called the charging anxiety,

03:19that fear of not being able to charge somewhere and running out of electric power.

03:24And also, the very high depreciation and the maintenance costs and the high insurance costs.

03:29There's a lot of issues there that deters consumers from buying into the EV transition.

03:37And do you think that the UK could learn from other countries

03:40where incentives for EVs have made a bigger impact, perhaps?

03:45Absolutely.

03:46I mean, obviously, Norway is one of the leading examples of very high EV adoption.

03:51And they made it, you know, there's lots of purchase incentives.

03:55They made electricity very easy to obtain.

03:59The charging infrastructure was very good.

04:02So they have an almost complete EV adoption in that country.

04:06Germany, until very recently, had a very strong EV incentive or purchase incentives and stopped them.

04:12And, of course, EV sales collapsed.

04:14And until about, I believe, two years ago,

04:16the UK also had a purchase incentive on electric vehicles and PHEVs,

04:20which it then stopped.

04:22And, of course, that saw a drop in the EV sales at that point.

04:25So purchase incentives are very important,

04:27but also the wider rollout of private or public charging infrastructure

04:32is absolutely crucial to convince consumers.

04:35Daniel, really interesting to get your thoughts on this today.

04:37Thank you so much.

04:38Daniel Harrison from Ultima Media.

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