Trump tariffs: Tesla’s UK subsidies underneath scrutiny, Rachel Reeves confirms assessment | EUROtoday

Tesla’s substantial UK taxpayer subsidies have come underneath renewed scrutiny following Donald Trump’s announcement of a 25 per cent tariff on imported autos to the US.

Chancellor Rachel Reeves mentioned the federal government is reviewing its electrical car transition guidelines, amid requires reciprocal tariffs on Tesla imports.

The Liberal Democrats have advocated for tariffs on Tesla, citing proprietor Elon Musk’s assist for the US president.

“Given Musk’s significant backing of Trump, imposing tariffs on Tesla imports would be a fitting response,” a celebration spokesperson mentioned.

Data printed by analysts Tussell in January revealed Tesla has benefited from £188 million in UK taxpayer subsidies since 2016, primarily via the plug-in automobile grant scheme.

This scheme presents monetary incentives for buying low-emission autos.

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Ms Reeves advised BBC Radio 4’s Today programme: “We don’t want to get into a trade war, but we are looking at the zero emission vehicle mandate, which is, I think, why some of that money goes to Tesla, and looking at how we can better support the car manufacturing industry in the UK.

“We announced in the budget last year, I think, around £2 billion for an automotive fund as part of our modern industrial strategy.

“But look, we are working intensely with the US to try to come to an agreement ahead of these tariff increases next week. Let’s see how that goes.”

A 25 per cent tax on autos and car components imported to the US will come into impact on April 2.

Liberal Democrat deputy chief Daisy Cooper mentioned: “Our car industry is being left at the mercy of Trump and his destructive trade war.

“We should be preparing to respond if needed including through Tesla tariffs that hit Trump’s crony Elon Musk in the pocket.”

Mr Musk mentioned tariffs will “affect the price of parts in Tesla cars that come from other countries”, including that the “cost impact is not trivial”.

This was in response to a publish on social media platform X – which he owns – which claimed Tesla “could benefit the most” from tariffs on US imports.

When Mr Trump grew to become president in January, he appointed Mr Musk to a task slicing authorities prices by main the newly established Department of Government Efficiency.

Figures from the Society of Motor Manufacturers and Traders present the Tesla Model Y was the fifth hottest new automobile within the UK in 2024 with 32,862 registrations.