The British government is considering excluding Tesla from its electric vehicle (EV) incentive program as a countermeasure to the 25% tariffs imposed by the United States. This move effectively positions Tesla as a target in the retaliatory tariff battle stemming from the Trump administration’s policies.
On Thursday, British Chancellor Rachel Reeves stated that the UK is working closely with Washington regarding the U.S. auto tariffs and mentioned that they are considering reviewing the subsidy policies currently benefiting Tesla, particularly to safeguard the British automotive industry.
This response follows U.S. President Donald Trump’s decision to levy a 25% tariff on all imported vehicles starting next month. The United States is a crucial export market for British automobiles, with the UK’s car exports to the U.S. reaching $9.6 billion in 2024.
The UK represents Tesla’s largest European market. Tesla’s sales in the UK outstrip those in France and Germany combined. Last February, Tesla sold approximately 4,000 vehicles in the UK, compared to 2,395 in France and 1,429 in Germany.
If the UK ultimately decides to exclude Tesla from its incentives, a decline in local demand is deemed inevitable. Currently, the UK offers EV buyers a range of benefits, including exemptions from vehicle taxes and coverage of up to 75% of charging station installation costs.
In a similar move, Canada recently decided to freeze EV subsidies for Tesla in retaliation against the 20% tariffs imposed by the U.S. Canadian Transport Minister Chrystia Freeland recently announced that the country plans to halt all subsidies for Tesla and remove them from Canadian support programs. The frozen subsidies cost roughly 43 million CAD (30 million USD).
