Trump trade tariffs: Impact on the UK EV uptake

5 min read 10 April 2025

By Ryan Thomson, Partner and expert in energy solutions, and Toby Thornton, Partner and expert in e-mobility

The global automative industry is at a critical juncture, shaped by intersecting forces of electrification, geopolitical trade tensions, and national decarbonisation policy. The latest update to the UK’s ZEV Mandate confirms that the 2030 phase-out date for new petrol and diesel cars will remain, but with increased flexibility for manufacturers — including the continued sale of hybrid and plug-in hybrid vehicles until 2035, and extensions to credit trading mechanisms that allow manufacturers to borrow against future ZEV sales. While car sales are broadly aligned with ZEV goals, van adoption lags, exacerbating challenges for manufacturing. These developments occur amidst growing pressure for affordability as median EV prices remain higher than ICE vehicles, despite a maturing second-hand market offering parity.

At the same time, China’s dominance in EV manufacturing, driven by early and deliberate government subsidy, sees companies like BYD reshaping the competitive landscape and surpassing Tesla in global sales in 2024. Chinese OEMs are also seeing aggressive price competition and market saturation at home. This dynamic is driving Chinese EVs into international markets, including the UK, where the demand for affordable EVs under £25,000 remains largely unmet by Western OEMs. Simultaneously, protective tariffs on automotive imports (including Chinese EVs) are likely to shift global supply chains and funnel oversupply into less restrictive markets like the UK, creating opportunities but also intensifying price competition.

With a ZEV Mandate that supports sales of hybrids to 2035 we could see a dilution in EV sales as OEMs double down on the most profitable PHEV segments, whilst the influx of lower-cost Chinese EVs may accelerate demand for affordable models and spur competition. A tariff war scenario could exacerbate affordability challenges and slow uptake whilst also creating opportunities for domestic OEMs. Regardless, we expect to see instability across residual values for both ICE vehicles and higher-cost Western EVs to 2030. For the UK market, addressing the interaction between global tariffs and the ZEV Mandate’s targets will be vital to provide certainty for consumers, infrastructure investors, and manufacturers navigating the EV transition.

Download our report below or get in touch with Ryan Thomson or Toby Thornton to find out more.

Our Experts

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Ryan Thomson

Partner, expert in Energy and Resources

Contact Ryan

Toby Thornton

Expert in Power and Low Carbon Solutions

Contact Toby

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