The European Union has asked China to restrain shipments of hybrid cars into the bloc, or face new tariffs, after monthly imports of China-made hybrids rose from 3,800 vehicles in October 2024 to 50,000 in July 2026.
The request, reported by the Financial Times on 17 September and confirmed in outline by subsequent reporting, is part of a wider attempt to narrow a goods trade deficit with China that Commission president Ursula von der Leyen puts at €1 billion a day.
An EU official said: “If they will not limit their exports to our market then we will. This is about stopping deindustrialisation. We have to act. It’s about managed trade.”
Trade commissioner Maroš Šefčovič is due in Beijing next month with an October deadline for “tangible results”.
According to Reuters, Brussels wants Beijing to limit Chinese hybrid vehicles sales to around 15 per cent of the EU market.
In October 2024 the EU added company-specific anti-subsidy duties to the standard 10 per cent car tariff on battery-electric vehicles made in China.
Combined rates now stand at about 27 per cent for BYD, 28.8 per cent for Geely and 45.3 per cent for SAIC, the parent of MG. Tesla cars built in Shanghai face a lower extra rate.
Plug-in hybrids were left out of that investigation and still pay only the 10 per cent duty. Battery-electric imports from China then rose only modestly. Hybrid imports took the growth.
Chinese brands accounted for 28.3 per cent of Europe’s plug-in hybrid market in the first half of 2026 and 34 per cent in June, according to Dataforce.
BYD’s Seal U and Atto 2 and Chery’s Jaecoo 7 have led the segment in several large markets.
Across all powertrains, Chinese brands took about 9.5 per cent of the European car market in the first half and about 11 per cent in June.
The value of EU imports of Chinese plug-in hybrid passenger cars rose from about €1.3 billion in the first half of 2025 to €3.4 billion in the first half of 2026.
The Commission publicly denied plans to tax Chinese hybrids as recently as January.
By June, Handelsblatt reported that countervailing duties on plug-in hybrids had been prepared and could be applied once a majority of member states agreed. Volkswagen chief executive Oliver Blume later called for duties “with no time to lose”.
Hybrid cars are not covered by the 2024 electric-vehicle duties and have the advantage to be functional in places without sufficient electric structures.
China’s commerce ministry has said so-called voluntary export restraints “seriously violate” World Trade Organization rules.
That leaves Brussels with the same route it used on battery-electric cars: An anti-subsidy investigation and manufacturer-specific duties. Any such move would risk further retaliation.
After the 2024 electric-vehicle tariffs, Beijing targeted EU cognac, pork and dairy.
Hyundai’s CEO said last week that Chinese electric cars are up to 40 per cent cheaper than competing models in the European market.
The Commission has also asked China for restraint on chemicals and for more purchases of European goods.
Chinese manufacturers are already shifting production into Europe.
China’s domestic car market is a bit in decline, urging companies to continue to grow abroad.
BYD’s first European passenger-car plant, at Szeged in Hungary, is due to begin series production in the fourth quarter of 2026. It is designed for both battery-electric and plug-in hybrid models.
The company is looking for a second site, with Spain and France the leading options, and has spoken of three assembly plants and a battery plant over the longer term.
Other groups are using spare European capacity: Leapmotor with Stellantis in Spain, Geely in talks with Ford in Valencia, Chery at the former Nissan plant in Barcelona, and further discussions involving Dongfeng, Nissan’s Sunderland factory and contract manufacturers.
AlixPartners estimates Chinese makers plan to almost triple overseas production to 3.4 million vehicles a year by 2030.
Local assembly would avoid the existing import duties.
It would not automatically satisfy the draft Industrial Accelerator Act, which would tie public procurement and some subsidies for electric and plug-in vehicles to assembly in the Union and to about 70 per cent European content, excluding the battery.
Von der Leyen told the European Parliament during her State of the Union on September 16 that the deficit with China had “reached a tipping point” and that a “second China shock … is already here”, visible in plant closures and job cuts.
Volkswagen has announced large German job reductions and factory closures.
Several member states, Germany among them, were uneasy about the original electric-vehicle duties because their own firms still sell and produce in China. Hybrid duties would reopen that split, even as some German executives now ask for them.
China from it’s part accuses the EU of being protectionist.
Any solution between China and the EU must balance their interests, comply with WTO rules and their respective domestic laws, and fully accommodate the interests of both sides’ industries”, China’s Ministry of Commerce said in a statement on September 18.
The higher prices mainly fall into the lap of European consumers.
Conner Allen, a former auto lobbyist in the European Capital told Brussels Signal that, “The EU has spent the last decade getting automotive policy wrong, and every time the market responds to one bad policy, Brussels seems determined to punish it.
“Hybrids are a perfect example. They are affordable, practical and deliver substantial emissions reductions without asking consumers to completely change how they drive. They should be an obvious part of Europe’s decarbonisation toolkit.
“Instead, having already regulated and taxed its own car industry into crisis, the EU instinctively reaches for another tax, another tariff, because consumers are buying the ‘wrong’ kind of low-emission car.
“There’s an old Reagan line about the government approach to the economy: ‘If it moves, tax it.’ Brussels increasingly seems determined to prove him right. More taxes on hybrids would hurt European competitiveness, hurt consumers and, ultimately, make the green transition harder rather than easier.”
New European Union rules governing how cars are designed, built and scrapped have been published in the Official Journal and enter into force on August 13. https://t.co/Z7YfQwW4pK
— Brussels Signal (@brusselssignal) August 12, 2026