The UK government is reassessing Tesla’s taxpayer-funded subsidies after former US President Donald Trump announced a 25% tariff on imported vehicles, raising concerns about the impact on Britain’s car industry.
Chancellor Rachel Reeves confirmed that the government is reviewing its electric vehicle transition policies, including the Zero Emission Vehicle (ZEV) mandate, which has contributed to Tesla receiving £188 million in UK subsidies since 2016.
These funds, mainly distributed through the plug-in car grant scheme, are designed to promote low-emission vehicle adoption.
The announcement follows calls from the Liberal Democrats to impose tariffs on Tesla imports in response to Elon Musk’s support for Trump. Liberal Democrat Deputy Leader Daisy Cooper criticized Trump’s “destructive trade war” and suggested that tariffs on Tesla would be a strategic countermeasure.
Trump’s 25% tariff, set to take effect on April 2, is expected to raise costs for US-based automakers relying on international supply chains. Musk acknowledged the financial impact, noting that Tesla imports parts from multiple countries.
Tesla remains a key player in the UK electric vehicle market, with the Tesla Model Y ranking as the fifth most popular new car in 2024, registering 32,862 sales.
As trade tensions escalate, the UK government is working with US officials to negotiate a resolution before the tariffs take effect, aiming to safeguard Britain’s car industry and maintain a stable economic relationship with the US.
