The UK government is considering removing Tesla from its incentive program for electric vehicles after the Trump administration imposed tariffs on all cars and trucks not assembled in the US.
Tesla is becoming a political pawn in Trump’s trade war.
Earlier this month, Tesla contacted the Trump administration to warn them that the automaker could be the target of retaliatory tariffs amid the president’s trade war.
The company was correct.
The Canadian government announced yesterday that Tesla would be banned from upcoming EV rebates – following the lead of several provinces.
Now, the UK is considering doing the same after Trump announced that all imported cars, including every British car sold in the US, will be subject to a 25% tariff starting next week.
UK finance minister Rachel Reeves said today:
We are looking at the zero emission vehicle mandate which is why some of… that money goes to Tesla, and looking at how we can better support the car manufacturing industry in the UK.
Reeves is clearly hinting at banning US automakers from the program or even Tesla in particular.
She is bringing this up as she is still negotiating with the US to try to get the British automobiles exempt from the new tariffs.
The UK is now Tesla’s biggest market in Europe and the only significant market where Tesla is still growing.
Tesla’s sales have crashed more than 40% so far this year in Europe.
Electrek’s Take
Elon Musk’s political meddling and the use of his sales of Tesla shares to finance Trump’s election has turned the automaker into a political pawn amid the trade war.
I guess that’s exactly what Tesla’s policy team was warning earlier this month.
Trump has not only turned many foreigners against American products in general by breaking previously agreed free trade agreements, including some he negotiated during his prior term, but the issue is compounded for Tesla due to its connection with Musk.
The UK government is now basically threatening Tesla to put pressure on Trump’s administration to back off with its tariffs.
It’s not a bad strategy considering they are negotiating with Howard W. Lutnick, the Secretary of Commerce, who is openly conflicted when it comes to Tesla.
Tesla’s situation is already dire in Europe, but the UK is currently its saving grace. With Tesla’s sales crashing in France and Germany, Tesla is now selling more vehicles in the UK than both those countries combined.
In the UK, electric vehicles are exempt from paying both the first-year and standard-rate annual vehicle tax. They also cover up to 75% of the cost of a charging station.
If Tesla buyers don’t have get access to those incentives, it would lose demand in the country.
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