(By Observer Net, Zhou Shengming; Editor: Gao Xin)

According to a report by the Financial Times on July 23, the UK government recently announced a subsidy policy for electric vehicles. The report said that the policy has been criticized by some car manufacturers as "causing confusion," and in fact, it excludes Chinese-made electric vehicles from the subsidy range.

It is reported that the total amount of this subsidy plan is 650 million pounds. The UK government will assess the eligibility for subsidies based on the carbon emissions of the electricity used in the production process of the vehicle. For electric vehicles priced below 37,000 pounds, the most environmentally friendly models can receive up to 3,750 pounds in subsidies, while models with slightly lower emissions can receive up to 1,500 pounds.

"This is a mess," said an executive from a car manufacturer to the Financial Times. It is reported that this subsidy policy has caused confusion within the British automotive industry, with some car companies even setting up "war rooms" to urgently analyze which emission category each model falls into, especially regarding some ambiguous clauses in the policy.

Aside from confusion about the specific details of the policy, industry professionals have warned that the policy may suppress new car sales in the short term and impact the second-hand electric vehicle prices in the long term.

In the UK, the majority of car purchases are made through financing, and the financing amount largely depends on the residual value of the vehicle after three years. Once the second-hand price drops, the monthly repayment for first-time buyers will significantly increase.

Toby Poston, head of the British Vehicle Rental and Leasing Association (BVRLA), warned: "Stimulating only new car demand without supporting the second-hand market will accelerate the depreciation of second-hand prices." He added: "The resulting losses will weaken market confidence and push up the cost of new car financing, offsetting the original intention of the subsidies."

In fact, before the new subsidy was introduced, the UK leasing market (which accounts for three-quarters of new electric vehicle sales) had already called on the government to introduce a stability mechanism due to severe fluctuations in second-hand electric vehicle prices.

The Chinese Embassy in the UK stated that it calls on the UK government to ensure an open, fair, impartial, and non-discriminatory environment for investment and operations of enterprises from all countries, including China. The Chinese side stated that exclusionary policies and protectionism are not conducive to the development of the electric vehicle industry and will resolutely safeguard the legitimate rights and interests of Chinese enterprises.

It is reported that Li Ke, Executive Vice President and Head of Overseas Business at BYD, criticized the UK's latest electric vehicle subsidy policy as "meaningless" when interviewed by the Financial Times. She said the policy aims to exclude Chinese brands and effectively becomes a "backdoor tariff."

She said the subsidy policy "is like a drug, and in the long run, it will harm the domestic market."

Li Ke stated that this policy will not affect BYD's sales in the UK and promised that BYD will open about 280 stores in the UK, creating more than 5,000 jobs by next year. It is reported that these stores will only sell BYD products, with each store employing about 20 people.

Alfredo Altavilla, former CEO of ITA Airlines and now a special advisor on European affairs for BYD, said: "Is there any European government that can permanently oppose Chinese-made cars? No. So what is the purpose of doing all this?"

It is reported that BYD plans to achieve localized production in Europe through its factories in Hungary and Turkey and open 2,000 retail stores across Europe. According to data from Schmidt Automotive Research, the share of Chinese brands such as BYD in the UK and European electric vehicle market has already reached nearly 5%.

This article is an exclusive article from Observer Net. Reproduction without permission is prohibited.

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