EU caps Chinese hybrid car imports at 350,000 a year under deal with Beijing

A cap on Chinese hybrids

The European Union will limit imports of hybrid and plug-in hybrid cars from China to 350,000 vehicles a year, an EU official said in Brussels on Monday, 12 October. The figure follows an understanding that EU trade commissioner Maros Sefcovic and Chinese commerce minister Wang Wentao reached on Friday, 9 October, after two days of intensive talks in Beijing. Neither side had published details at the time. Once the annual quota is used up, EU customs authorities will not approve further Chinese hybrids, so additional vehicles cannot enter the market. The measure is a safeguard with quotas distributed by country of origin rather than a higher tariff, and the official said it complies with World Trade Organization rules.

Why Brussels acted

The EU imposed additional duties on Chinese battery-electric cars in 2024, and manufacturers such as BYD, Chery and SAIC responded by exporting more hybrids, which were outside those duties. Chinese customs data show hybrid exports to the EU tripled in the first half of this year, from $2.5 billion in the previous year to $7.5 billion. European officials fear Chinese cars, which are cheaper, could push European manufacturers out of the market. The EU Commission estimates that Chinese plug-in hybrid shipments could reach about 800,000 vehicles this year. The official said the agreement would cut current exports to the EU by more than half.

The numbers and the rules

The quota starts at 350,000 vehicles in its first year, rises by 6% each year and runs for four years. China has indicated it could export at least 302,000 hybrid vehicles a year to the EU under the agreement, a figure below the EU's 350,000. The chart sets the EU's first-year cap against China's indicated minimum and the roughly 800,000 vehicles expected in 2026. Although the mechanism formally applies to other exporting countries, none approaches the volume China sends to Europe. Rules of origin offer Chinese makers a way around the cap: a Chery built in Spain would not count as an import of Chinese origin. Bill Russo, founder of the Shanghai-based consultancy Automobility, said closer-to-customer investment becomes more attractive when imports are limited, but that the location requires capital and smaller players could reconsider their European ambitions.

Beijing's response and concessions

Sefcovic called the agreement an important first step toward restoring the balance of trade between the two sides. He said China also agreed to lower tariffs on some products from the EU. A joint statement says China will make it easier to approve export licences for rare earths and permanent magnets for the EU. Brussels has not explained what concessions it made to Beijing under the deal. China welcomed the trade compromises on Saturday, 10 October, saying they had prevented further escalation and allowed a 'new start'. European companies and politicians have long accused China of unfair practices, including subsidies, currency manipulation and restricted access to the Chinese market, which Beijing rejects while pointing to the competitiveness of its industry.

What comes next

If the whole EU bloc backs the mechanism, it could start applying on 1 December. EU heads of state and government are due to discuss the strained trade relationship at the end of the week of 12 October. The EU imports far more goods from China than it exports to it, and European companies depend on Chinese raw materials, semiconductors and materials for renewable energy.