Chinese electric vehicle (EV) maker Leapmotor has triggered a price war in the UK market by offering steep discounts on its cars, mirroring the UK government’s new EV subsidy scheme — despite likely being ineligible for the grants.
Strategic Discounts Despite Exclusion
The company announced £1,500 and £3,750 price cuts on its EV models—matching the values of the government’s new grants, which aim to boost local adoption of battery-powered vehicles. However, the government structured these grants with tight eligibility rules that effectively exclude most Chinese-made vehicles.
- The To3, Leapmotor’s compact model, now costs £13,499, making it the cheapest EV in the UK, undercutting the Dacia Spring (£14,999), which is also built in China.
- The C10 SUV was discounted by £3,750, bringing the price to £32,750.
Government Grant Scheme Overview
The new £650 million EV grant programme offers:
- Up to £3,750 off for the cleanest EVs priced below £37,000
- £1,500 for mid-tier eligible models
- No discount for a third category — which includes most Chinese-manufactured vehicles
Industry insiders have referred to this structure as “backdoor tariffs” targeting Chinese automakers.
Leapmotor’s UK Position
Leapmotor’s UK Director Damien Dally acknowledged the exclusion risk:
“If we qualify, then fabulous. If we don’t, we still did the right thing today.”
The brand, which only entered the UK market in March 2025, currently holds 0.1% market share, compared to BYD’s 1.9% and Chery’s 1.5%, according to the Society of Motor Manufacturers and Traders.
Despite its Chinese roots, Leapmotor is operating in Europe through a joint venture with Stellantis, which owns Vauxhall, Peugeot, and Jeep. It plans to begin European assembly in the future to navigate import restrictions more easily.
Industry Response and Market Tension
The established European auto industry fears this bold pricing will spark a price war, potentially harming EV margins in an already tight market.
“Consumers need confidence,” Dally said. “We positioned ourselves for September — the big sales month.”
In contrast, European and Asian automakers are cautiously navigating the complex grant criteria, unsure which of their models qualify for which level of subsidy.
BYD’s Reaction
EV giant BYD welcomed the grant program and confirmed its intent to apply for eligibility:
“We look forward to being part of it,” said Bono Ge, BYD UK head.
Political and Diplomatic Implications
A Chinese embassy spokesperson criticized the subsidy scheme:
“Exclusive policies and protectionism are by no means conducive to the development of the EV industry… We will resolutely safeguard the legitimate rights and interests of Chinese companies.”
Meanwhile, some UK officials welcomed Leapmotor’s price move, calling it “good news for the consumer”, as it places downward pressure on EV prices regardless of grant eligibility.
What Comes Next?
- Eligibility lists for the UK EV grant are still pending, creating uncertainty for manufacturers.
- Consumers expecting £3,750 off may be disappointed if most approved models fall in the £1,500 band.
- Leapmotor will review its pricing strategy at the end of September, but hopes to maintain the discounts until year-end.
Bottom line: Leapmotor has undercut the UK EV market at a critical moment — mirroring government grants and raising questions about fair competition, eligibility, and the future of European EV manufacturing.
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