China has warned Labour could be in breach of World Trade Organisation (WTO) rules after news emerged that their electric cars could be banned from the Government’s new EV grant scheme. Beijing has stressed the UK should provide a “fair” and “non-discriminatory” environment for trade and stressed they would “resolutely safeguard” their interests.
It comes after Labour announced a stunning £650 million grant as an incentive for motorists buying new electric vehicles.The new scheme would see motorists offered up to £3,750 after finalising deals on models listed below £37,000. The expensive cost of new EVs means Chinese brands, who usually sell at a much lower upfront cost, looked to be among the biggest beneficiaries when the scheme launched.
However, transport minister Lilian Greenwood admitted cars that were assembled in China won’t be eligible for the scheme. The news led to a stern response from Chinese officials on Thursday just hours after Labour’s admission.
According to the Telegraph, a Chinese embassy spokesperson said: “China has abolished all market access restrictions on foreign investment in manufacturing and remains open to international carmakers, including those from the UK, who can fully share in the dividends of China’s big market.
“We hope the UK’s industry policy will observe WTO rules, respect market economy laws and provide an open, fair, just and non-discriminatory environment for the investment and operation of businesses from all countries, including China. The Chinese side is closely following the situation and will resolutely safeguard the legitimate rights and interests of Chinese companies.”
WTO rules state that members must not give favourable treatment to one country over another while trading goods and services.
It could be a blow to the many Chinese firms who have started to get a foothold in the UK market. BYD is one of these, with the Chinese manufacturer already looking to be a serious challenger to market leader Tesla.
BYD has plans to build a factory in Hungary, which they hope could be enough to convince UK officials to allow them access to the scheme. BYD’s UK country manager, Bono Ge stressed the firm still welcomed the Government’s new project.
He explained: “Like other car brands, we have informed the DfT of our intention to make an application for inclusion in the ECG scheme and look forward to being part of it.”
A DfT statement to Express.co.uk said: “Our Electric Car Grant will give drivers across the UK access to discounts on dozens of new electric car models, helping them save up to £3750 per car and putting money back into the pockets of working people.”