The UK is reportedly considering countervailing duties on Chinese electric vehicles (EVs), potentially aligning with higher tariffs imposed by the EU. For Tata Motors Passenger Vehicles (TMPV), this creates two opposing forces on its turf: a potential price advantage over Chinese rivals in the UK, and a further erosion of its position in China if Beijing retaliates.
Chinese brands have rapidly expanded their UK presence, accounting for about 15% of new car sales through most of 2026 before brands including BYD, MG, and Jaecoo reportedly captured 23% in September. EVs represent two-thirds of China’s domestic automobile market.
Chinese cars have allegedly found a backdoor into the EU through the UK, taking advantage of Britain’s relaxed 10% tariff compared to the EU’s 45%. This loophole could risk UK’s exclusion from the EU’s proposed ‘Made in Europe’ framework, prompting Britain to consider matching the EU’s countervailing duties on Chinese imports. For TMPV, however, any direct benefit is minimal, while potential retaliation from China could hit where it hurts most.
China is already a weak market for JLR. The company’s retail volume in China fell 60% year-on-year in Q2, even as UK retail volume rose 31%. China’s contribution to retail volume fell to just 9% from 21% a year earlier.
This drop stems partly from the Chery-JLR joint venture halting local vehicle production in June. Meanwhile, the Chinese market remains tough due to fierce competition, which has prevented JLR from passing on the luxury tax—a levy expanded last year to cover vehicles priced above 0.9 million yuan, down from 1.3 million yuan previously.