In December, Chancellor Jeremy Hunt met up with Eric Li, founder of Geely, the Chinese car manufacturer which owns Volvo and Lotus.
The contents of the meeting have not been disclosed, but the fact it happened is an indicator of how important China has become to the UK car industry.
In turn, Tesla and Ford are slashing electric vehicle (EV) prices in anticipation of competition from China, where brands like BYD and Ora can undercut their Western rivals for a host of reasons, including cheaper power and labour. Shares in Elon Musk’s mass-market electric car pioneer slumped earlier this week after his own price-cutting ate into the company’s profits.
But despite being marketed as a green alternative to petrol-powered cars, the influx of cheap EVs from China may be far less environmentally friendly even before their new owners can get behind the wheel.
Shipping millions of tonnes of cars over thousands of miles and using coal-intensive electricity to make them has cast doubt over their green credentials. It is also fuelling scepticism on social media over whether buying an EV is a sensible choice.
Freight statistics suggest all is well. Shipping is the least environmentally damaging form of commercial transport per tonne, the International Chamber of Shipping claims, with the largest container vessels capable of emitting just three grams of CO2 per tonne of goods for each kilometre travelled.
This means a 2-tonne EV shipped 20,000km to the UK from China would emit just 120kg of carbon dioxide in its journey.
Meanwhile, a petrol car emits about 4.6 tonnes of CO2 every year, according to the US Environmental Protection Agency (EPA), assuming the car drives 22 miles per gallon and 11,500 miles every year, suggesting that shipping represents a small proportion of a car’s carbon cost.
The EPA’s research also shows that over their lifetime, petrol cars are still more than twice as polluting as battery cars. That’s allowing for US electricity production, which relies mainly on fossil fuels like Britain's, and for factors such as production pollution and disposing of the vehicles.
Figures in the UK are hard to come by, but in the US, Reuters analysis from 2021 said that a Tesla Model 3 driver had to cover 13,500 miles before the purchase was better for carbon output than a comparable petrol car, in this case a Toyota Corolla.
That is a best-case scenario: in countries with energy production that is mainly coal-powered, like China and Poland, a more punishing 78,700 miles must be driven for any green benefits to kick in.
Analysts at Australian bank ANZ Group warned that China will probably need to burn more coal, partly to account for more electricity demand from electric cars, as well as droughts which are cutting off hydroelectric power.
But even when charged from a fossil fuel-powered grid, EVs win out thanks to the same efficiency gains found in hybrid models, where braking helps top up the battery and stop-start driving in traffic is battery-powered, rather than using inefficient combustion at low speeds.
However, all these numbers are moving targets, says Andrew Graves, a car industry veteran and professor at the University of Bath.
While electric power is getting greener every year, so is China’s industry. Where Chinese steelmakers once emitted 4.5 tonnes of carbon for each tonne of steel made, that figure is closer to 2.5 tonnes today, compared to 1.5 tonnes in the UK, steel industry sources said.
They are also largely government-owned and controlled, which confers certain other advantages, sources added. Though UK steel makers contribute £125m of carbon taxes, Chinese steel makers probably are not paying, they suggested. Economic distortions such as this can make Chinese EVs seem artificially cheap.
Manufacturers must also import lithium to make batteries, mined predominantly thousands of miles away in Australia and Chile. To support the electrification of both cars and heavy industry, millions of tonnes of copper is also shipped in from Chile, Peru and the Democratic Republic of Congo.
The impact of transporting this metal, which is hauled by diesel trains to the coast and then moved on ships burning poor grades of oil, is not factored into carbon calculations, says Prof Graves.
Trying to find comparable figures for car production and use is “where madness lies,” says Prof Graves, but he adds: “It's absolutely clear that the longer the supply chain, the worse for the environment.”
Modern carbuilding involves components crossing several borders as specialist suppliers build modules and ship them for final assembly. This complex ecosystem is cheaper to operate but more carbon intensive due to the number of parts moving between countries. As carbon accounting becomes the norm, it will make a lot less sense.
Prof Graves was part of a team of researchers who championed the concept of a “three-day car”, where a customer orders a car on a Monday, it is made on a Tuesday and delivered on a Wednesday.
Building cars locally cuts back on managing lengthy supply chains and also makes recycling them easier, he says. It also cuts out wasted energy in moving cars and their components around the world.
But in the 20 years since Prof Graves and his team posited the idea, little has changed. “We really need to take a sensible pill here and think about building closer to the customer, not just for environmental reasons, but also for branding reasons and giving the customer the car that they want when they want it,” he says. “We're moving away from that at the present moment.”
The Society of Motor Manufacturers and Traders (SMMT) reported last month that the UK is seventh best of the 20 biggest car-making nations for green electricity, beating Germany and with China and India ranking last.
The UK could move further up the league table as more wind farms are built, the lobby group suggested.
Mike Hawes, SMMT chief executive, said that building cars closer to where they are sold “can have significant benefits”, including reduced environmental impact and lower costs.
“To capitalise on these strengths and keep Britain at the forefront of the race to zero, we need to ensure we are globally competitive in all respects, with a particular focus on bringing down the UK’s currently high cost of energy,” he added.
Simpler, lighter cars are also needed, says Prof Graves. The weight of the average car in the UK has roughly doubled in the last 50 years, which makes them less efficient. While 500kg battery packs are partly to blame, a move away from compact family cars to Sports Utility Vehicles packed with technology is also a factor.
There are reasons to be optimistic, however. Power generation and steelmaking will become greener and cheaper as more is learned about them, as in the early days of petrol cars and electricity generation, Prof Graves notes.
But British car makers and the UK at large must seize upon these advantages to avoid losing out to state-subsidised competitors, Prof Graves warns. This may mean taking Prime Minister Rishi Sunak’s much-derided push towards numeracy seriously.
“Talking about maths and science, and how important it is, is absolutely right,” Prof Graves says.
“Car making means high-value jobs in high-value sectors. And we're moving in the other direction at the present moment.”
