Beijing has issued a stern warning to the UK Government amid rumours that Chinese electric vehicles could be excluded from a new £650million grant scheme.
Earlier this week, Labour launched the groundbreaking new Electric Car Grant to help more motorists get behind the wheel of an electric vehicle.
Drivers will be able to save up to £3,750 with a grant on a new electric vehicle if it costs less than £37,000.
A Chinese embassy spokesman cautioned that China would "resolutely safeguard" its electric car industry following the revelation.
Do you have a story you'd like to share? Get in touch by emailing motoring@gbnews.uk
BYD/GETTY
|Labour could look to block Chinese auto brands from making use of the new Electric Car Grant
Reports suggest that the Department for Transport plans to reject applications from Chinese manufacturers due to environmental concerns.
The embassy spokesman urged Britain to "observe World Trade Organisation rules" and "provide an open, fair, just and non-discriminatory environment for the investment and operation of businesses from all countries, including China".
Transport Minister Lilian Greenwood confirmed the restrictions during an interview with BBC Radio 4's Today programme on Wednesday.
She said: "We don't expect any cars that are assembled in China to be eligible for this scheme."
READ MORE: Electric car grant hailed as a 'significant step forward' as drivers could save £3,750 on new EVs
The Future of Roads Minister explained that eligibility would be limited to manufacturers meeting minimum environmental standards.
"Frankly, if you generate a lot of the electricity that powers your factory through coal power stations, then you are not going to be able to access this grant," Greenwood said.
The scheme aims to boost electric vehicle adoption ahead of Labour's 2030 ban on new petrol and diesel car sales.
Under current Zero Emission Vehicle mandate regulations, 28 per cent of vehicles sold this year must be fully electric, with manufacturers facing potential fines for missing targets.
LATEST DEVELOPMENTS:
The Chinese embassy's statement emphasised that China has "abolished all market access restrictions on foreign investment in manufacturing" and remains open to international carmakers, including British manufacturers.
The spokesman stressed that these companies "can fully share in the dividends of China's big market," The Telegraph reported.
The embassy called for the UK's industry policy to "respect market economy laws" whilst adhering to World Trade Organisation regulations.
WTO rules prohibit member states from giving preferential treatment to one country over another in goods and services trading.
NEW: Chinese car brands set for UK launch with new electric vehicles coming soon - 'Exciting opportunity'
BYD | BYD said it looks forward to applying for the Electric Car Grant, despite Labour's concerns about Chinese manufacturers
"The Chinese side is closely following the situation and will resolutely safeguard the legitimate rights and interests of Chinese companies," the spokesman warned.
The restrictions are expected to affect major Chinese manufacturers, including BYD and MG, which assemble their vehicles in China.
Despite the threat, Bono Ge, BYD's UK country manager, said: "We welcome the new electric car grant and its potential to help drive awareness and uptake of electric cars in a key, price-sensitive part of the new car market.
"Like other car brands, we have informed the DfT of our intention to make an application for inclusion in the ECG scheme and look forward to being part of it."