The EU pushes the trade defense line from pure trams to hybrid vehicles: after China's plunging of waste sales, "15% share" becomes new controversy

The Chinese car trade dispute in Europe is extending from pure electric vehicles to plug-in hybrid vehicles. The Financial Times said this week that the EU is hoping that China will “voluntarily” restrict hybrid vehicle exports to Europe, controlling China’s manufacturing hybrid market share at about 15 percent; the current share has exceeded one-third.

China's Foreign Ministry and the Ministry of Commerce responded on September 18.The Ministry of Foreign Affairs said it would closely follow European trends and demand that the EU abide by market openness, fair trade and the World Trade Organization rules; the Ministry of Commerce expressly opposed the so-called "voluntary export restrictions", saying any Sino-European solution should comply with the WTO rules, domestic laws of both sides and take into account both industry interests.

After the tariffs were imposed on pure trams, Chinese car companies quickly turned to blur

The EU imposed anti-subsidy tariffs on pure electric vehicles manufactured in China in 2024, with different enterprises paying different additional tax rates in addition to the 10% basic import tax. Hybrid vehicles were not included in the same set of anti-subsidy measures, and the EU market mainly still applies the 10% general car import duty.

This policy difference quickly changed the European product structure of Chinese car companies. The Financial Times that the import of Chinese-made hybrid vehicles has increased rapidly over a year and has reached about 50,000 units by July 2026, more than ten times more than before. For companies such as Biady, plug-in models can both avoid higher additional tariffs on pure electric vehicles, but can adapt to the real needs of some European consumers for charging infrastructure, duration and prices.

The Seal U DM-i and ATTO 2 DM-i models, which are promoted in Europe, represent this strategy.The plug-in model retains fuel engines and can be externally charged, runs on pure electricity in daily short distances and reduces consumer reliance on the charging network on long distances.

European debate has shifted from ‘subsidy fairness’ to ‘Industry can sustain’

German Deputy Prime Minister and Finance Minister Lars Klingbeil publicly argued on September 17 that the EU should address China's imports of plug-in hybrid vehicles with more stringent trade measures, including possible tariffs and demands to increase the proportion of localized car production.

Traditional car manufacturers in Europe are under significant pressure.The Volkswagen Group is pushing for a massive restructuring, with the European automotive industry on the one hand facing the cost of electrification transition, and on the other hand facing competition for Chinese brands in price, software, battery and model upgrades. Reuters Breakingviews analyzes that Chinese brands have achieved approximately 9% of passenger car sales in the EU in the first half of this year and may continue to expand.

This complicates the EU’s policy objectives: Chinese manufacturers can adjust their products by mixing, accelerating and other forms of power if they only deal with pure electric vehicles; and if restrictions are further extended to hybrid vehicles, they may be challenged by shifting from trade relief to broader market protection for specific subsidies.

Why “15% Voluntary Restriction” Caused Strong Opposition in Beijing

The so-called voluntary export restrictions are usually undertaken by the exporter to limit the quantity, price, or market share of exports in order to avoid the direct imposition of higher tariffs or quotas by the importer.

The EU faces another set of political pressures: if low-cost imports continue to rise rapidly and European factories continue to cut jobs, it will be difficult for member governments to just look at the problem as a competitive market.

Thus, “15%” is not just a car sales figure, it represents how both China and Europe rediscover the boundaries between market opening and industrial protection.The EU wants to slow down the growth of Chinese car imports while avoiding a comprehensive trade war; China is reluctant to accept a set of arrangements that could lock fast-growing models long-term in fixed market share.

Chinese automakers are ready to transform “export” into “European production”

The higher the trade barriers, the greater the economic attractiveness of localized production.BIA Europe consultant Alfredo Altavilla said on September 16 that the company could eventually need to build three full-car assembly plants and one battery factory in Europe.BIA is pushing its first European factory in Hungary and plans to continue to look for new production bases, Spain and France are included in possible options.

If more and more Chinese brands are producing locally in Europe, the future controversy will turn from simply “importing Chinese cars” to more complex questions: where the vehicles are assembled, where the batteries and parts come from, how much local added value, how government subsidies are calculated, and whether a Chinese-controlled European factory should be seen as part of the European industry.

This also shows that trade restrictions will not necessarily keep Chinese car companies out of Europe, but may force them to move capital, factories and supply chains faster into the EU market.

European consumers, industrial workers, and governments see three different problems.

Consumers are concerned about model prices, quality and cost of use; European car companies and workers are concerned about orders, factories and employment; EU governments must also consider long-term industrial security, trade rules and relations with China.

If Chinese hybrid imports are restricted, the domestic European automotive industry may get more adjustment time, but consumer low-cost models may be reduced; if competition is fully open, traditional European manufacturers may bear greater price pressure and job cuts risk.

China-European automobile friction from pure electric vehicles to hybrid vehicles, indicating that the original anti-subsidy tariffs did not end competition, only change the location of competition.The next phase determines the market pattern, may not only the border tariff rate, but the local European factories, the proportion of local parts, supply chain control and the new energy vehicle technology route itself.

For Chinese car companies, the European market remains a huge commercial attraction; for the EU, the real difficulty is not whether to restrict imported vehicles, but how to allow its automotive industry to survive in an already globalized technology and cost competition while opening up its markets.