China and the EU have reached an agreement to limit the export of Chinese hybrid and plug-in hybrid vehicles to the European market. The deal aims to reduce exports by several million units over the next four years to address the growing trade surplus and protect European manufacturers from competitive pressure.
The agreement follows a surge in imports, with monthly figures recently reaching approximately 50,000 hybrid and plug-in hybrid vehicles. Chinese manufacturers shifted focus to these models after the EU imposed anti-subsidy tariffs on fully electric cars in October 2024, leaving hybrids subject only to a standard 10 per cent duty.
Data from the European Automobile Manufacturers Association (ACEA) shows that the market share of Chinese brands for hybrids in Europe rose to 14 per cent in the first half of 2026, up from 2 per cent in 2024. For plug-in hybrids, the share climbed to 25 per cent from 2 per cent in the same period.
The European Council will evaluate the results of the negotiations on October 15 and 16. If approved, the European Commission will initiate the necessary procedures. While specific technical details remain pending, the EU and China plan to continue trade consultations, with further meetings scheduled for January and March 2027.
