Chinese-made electric vehicles (EVs) are unlikely to benefit from the Government’s new electric car grant, due to concerns over the environmental standards of their production facilities.
The scheme, worth up to £3,750 off the price of a new battery electric vehicle (BEV), was unveiled on Monday (July 14) as part of a £650 million package to encourage EV adoption.
To be eligible, cars must have a list price of £37,000 or less and meet strict sustainability requirements. Two grant levels are available:
- Band 1 (‘greenest’ models): up to £3,750
- Band 2: up to £1,500
Eligibility is tied to manufacturers committing to a verified science-based target (SBT) and achieving embodied carbon scores below set thresholds.
Speaking on the BBC’s Today programme (July 16), Transport Minister LilianGreenwood said she did not expect any China-assembled models to qualify.
“The grant is restricted to manufacturers meeting minimum environmental standards,” she said. “If much of your factory power comes from coal, you won’t be able to access this grant.”
That means brands producing vehicles in China – including fleet favourites BYD and MG – are unlikely to qualify, as the country’s car and battery industries remain heavily dependent on fossil fuels.
The timing is significant: Chinese newcomers are rapidly gaining ground in the UK fleet market. In the first half of 2025:
- BYD’s true fleet sales surged 643% year-on-year, reaching nearly 7,500 registrations and overtaking MG in overall rankings.
- Jaecoo, launched in February, sold over 3,000 units, outperforming Fiat, Seat and Mazda.
- Sister brand Omoda also posted strong results, outselling Citroën and Honda.
Together, these brands now hold almost 8% of the true fleet market.
The move has prompted criticism from Beijing. According to The Telegraph, the Chinese embassy urged the UK to follow World Trade Organisation (WTO) rules and provide a “non-discriminatory environment for investment.” WTO principles require members not to give preferential treatment to one country over another in trade.
A spokesperson said: “The Chinese side is closely following the situation and will resolutely safeguard the legitimate rights and interests of Chinese companies.”
In response, BYD said it has notified the Department for Transport (DfT) of its intention to apply for the scheme and looks forward to being “part of it.”