Chinese EVs to Trigger Price War in Britain Amid Continued Battery Safety Concerns

A Go Ultra Low Nissan LEAF on charge on a London street in an undated file photo. (Miles Willis/Stringer/Getty Images)

Fierce competition for electric car buyers is expected this year, as China is set to claim one-sixth of the UK electric car market by 2030, according to analysis.

Manufacturers of Chinese brands are looking at overseas markets after succeeding domestically, the “Road to 2035” report by online vehicle marketplace Auto Trader said.

This is expected to trigger a price war in the UK electric car market this year.

Chinese brand MG has captured 4 percent of the market, overtaking Telsa with 3 percent of new car sales.

Other Chinese brands, like BYD, GWM and Nio are still struggling with low brand awareness in the UK market, compared with more familiar brands to Britons, like Ford.

Last year, China overtook Japan as the world’s biggest car exporter for the first time. According to Auto Trader, Chinese brands hold the pricing power in the British market, due to the gap in domestic and overseas prices, as high as £19,000 for some models.

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The pricing gap gives Chinese entrants the upper hand “to take on established Western brands in the UK,” the vehicle marketplace said.

In addition to the pricing gap, one of the reasons Chinese electric cars are cheaper is the mass production of lithium batteries in the Far East.

Meanwhile, Britain lags behind in lithium battery production despite the government’s push for new large-scale electric vehicle battery manufacturing plants, known as gigafactories.

Safety Concerns

Chinese EVs have not only been reported to stir price wars in the UK market, but have also raised security concerns among auto industry experts.

Last year, the president of the Institute of the Motor Industry, Professor Jim Saker, called the “threat of connected electric vehicles flooding the country” the most effective “Trojan horse” by the Chinese establishment.

He suggested that the software in Chinese EVs could allow Beijing to immobilise hundreds of thousands of vehicles in a stroke remotely.

Andy Mayer, chief operating officer at the Institute of Economic Affairs, has argued that while the “Trojan horse” threat was not top of the list, concerns about third-party hackers, who could infect the car software, remained.

However, the bigger issue with the Chinese technology is its quality and the danger of batteries catching fire, Mr. Mayer added. His voice is among many that have been addressing safety risks, posed by lithium batteries that charge EVs.

UK politicians, residents groups, emergency services and manufacturers in the sector have been vocal about safety concerns, surrounding battery-charged vehicles.

Bob Blackman, chair of the All Party Parliamentary Fire Safety and Rescue Group, has been campaigning against plans to build an electric bus garage underneath a residential skyscraper in Edgware, north London.

He has cited a “huge fire safety risk” posed by lithium, a chemical that burns at a very high temperature, that could lead to the collapse of the building.

ZEV Mandate

Safety concerns surrounding the EV technology come amid pressure by the government’s Zero Emission Vehicle (ZEV) Mandate that came into law on Jan. 3.

Under the mandate, car manufacturers are required to sell a certain percentage of electric vehicles each year.

The percentage of ZEVs sales is required to reach 100 percent in 2035. Manufacturers who fail to abide by the mandate will be fined £15,000 for every internal combustion engine (ICE) car they sell above the 78 percent limit.

The pressure of the ZEV mandate is likely to lead to more competitive prices, as sellers look “to tempt retail buyers.”

The chief executive of the Society of Motor Manufacturers and Traders (SMMT), Mike Hawes, has suggested that the government’s green ambition should be accompanied by financial backing.

Financial incentives could ease the cost of electricity affecting private motorists. The still-developing UK public charging infrastructure adds to the list of concerns for drivers.

Last year, the SMMT reported that drivers can’t keep up with Britain’s “ambitious EV transition timeline” following the removal of the plug-in car grant scheme in June 2022.

Under the scheme, private owners could get up to £1,500 off an EV, but the government ended the programme to focus on “improving electric vehicle charging.”

Chris Summers contributed to this report.