The Government has suggested that Chinese-made electric vehicles (EVs) will not qualify for its new electric car grant based on the environmental standards of production facilities.
The new electric car grant – worth up to £3,750 off a new battery electric vehicle (BEV) – was announced by the Government on Monday (July 14).
To qualify for the £650 million scheme, electric cars must have a recommended retail price (RRP) of £37,000 or less, with two levels of grant available depending on the carmaker’s sustainability standards.
The ‘greenest’ vehicles in band one will receive up to £3,750, with band two vehicles receiving up to £1,500.
The electric car grant (ECG) requires manufacturers to have committed to a verified science-based target (SBT) and have embodied carbon scores below a certain threshold.
Speaking on the BBC’s Today programme on Wednesday (July 16), transport minister Lilian Greenwood said she did not expect any cars that are assembled in China to be eligible for the grant.
“The grant is restricted to those manufacturers that reach minimum environmental standards,” she added. “And, frankly, if you generate a lot of the electricity that powers your factory through coal power stations, then you are not going to be able to access this grant.”
It suggests that carmakers that produce their vehicles in China, including fleet favourites BYD and MG, will not benefit from the subsidy, because its car manufacturing and battery production industries are reliant on fossil fuels.
It comes as new-to-market brands from China have achieved significant sales in the true fleet market in H1 2025.
Figures provided to Fleet News that true fleet sales for BYD, Omoda and Jaecoo have soared, while the performance of some established premium brands have suffered.
BYD’s true fleet sales were up by 643% in the six months of 2025, when compared to the same period last year.
The brand has secured almost 7,500 true fleet registrations this year, enabling it to leapfrog rival brand MG in the overall sales ranking.
Jaecoo, which launched in the UK in February, has already sold more than 3,000 cars into the true fleet market – outperforming brands such as Fiat, Seat and Mazda.
Sister brand Omoda has also had a strong start, outselling the likes of Citroen and Honda in true fleet.
It gives the Chinese newcomer brands a combined true fleet market share of almost 8%.
According to The Telegraph, the Chinese embassy has called on the UK to follow World Trade Organisation (WTO) rules and create a “non-discriminatory environment for investment”.
WTO rules stipulate that members must not give favourable treatment to one country over another when it comes to trading goods and services.
An embassy spokesperson added: “The Chinese side is closely following the situation and will resolutely safeguard the legitimate rights and interests of Chinese companies.”
BYD says that, like other car brands, it has informed the Department for Transport (DfT) of its intention to make an application for the electric car grant scheme and looks forward to being “part of it”.
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