The EU appears to be considering an import restriction on Chinese hybrid cars.
After China rejected voluntary export restrictions on hybrid cars to the EU, the European Commission is now preparing import restrictions on such vehicles through a safeguard measure. However, this could also merely be a bargaining tool to reach an agreement, as both sides are negotiating on the topic in Beijing starting today.
China’s Best-Selling Hybrid Car, BYD Seal U DM-i
Image: BYD
After the EU imposed special tariffs on electric cars from China as early as two years ago, ranging up to 35.3 percent depending on the manufacturer, a similar measure for hybrid cars is now becoming increasingly likely. Since summer 2025, as a result of these punitive tariffs, Chinese brands active in Europe such as BYD and MG Motor have been focusing more on hybrids, which are subject only to the regular 10 percent car tariff. While BYD focuses exclusively on plug-in hybrids (PHEV) like its best-selling model, the BYD Seal U DM-i, with 11,291 new registrations alone in Germany from the start of the year (January to September), MG Motor also has successful full hybrids in its lineup.
In other words, while the special tariff hinders the import of locally emission-free full electric vehicles, it does not apply to hybrid vehicles that combine a combustion engine with an electric motor and thus also emit CO2 locally. This is also bad for the EU’s climate goals.
According to a media report, the European Union is said to have asked China several weeks ago to voluntarily restrict exports of hybrid cars to Europe — but China rejected the request. Specifically, China’s Ministry of Commerce stated in its initial response to the EU’s call to limit hybrid car exports that “so-called voluntary export restrictions represent a serious violation of the rules of the World Trade Organization (WTO).” The ministry rejects “using them to resolve trade disputes in the automotive sector between China and the European Union.”
Quotas rather than special tariffs starting with the first hybrid car
But the EU seems unfazed: According to news agency Bloomberg, the European Commission is now preparing measures to restrict the import of Chinese hybrid vehicles into the European Union. Bloomberg cites people familiar with the matter for this report.
Unlike electric cars from China, it appears there won’t be a special tariff for each imported Chinese hybrid vehicle. Instead, the European Commission is likely considering setting quotas, similar to what Canada does for electric cars from China. This means that within a specified period, a certain number of Chinese hybrid vehicles can continue to be imported into the EU at the regular 10 percent car tariff. However, if manufacturers want to import more Chinese hybrids, an additional special tariff of yet unknown magnitude would apply.
The Safeguard Instrument can be implemented more quickly
Brussels would most likely turn to the EU’s Safeguard Instrument in such a situation. This instrument allows for special tariff quotas, among other measures, when there is a sudden increase in imports that causes or threatens serious damage to European manufacturers. Within a set import volume, the existing tariffs apply; beyond that, an additional duty may be imposed. However, such safeguards are not intended to be country-specific but are usually applied by the EU to imports of such products from all third countries.
Thus, the import barrier for hybrid cars would represent a completely different measure compared to the special tariffs on electric cars from China. In the case of BEVs, after a lengthy anti-subsidy investigation, the EU concluded that certain automakers in China were supported by their government with unacceptably high subsidies, allowing them to sell their products in Europe at lower prices than European companies that did not receive such support. Therefore, these tariffs, often referred to as special duties, are actually anti-subsidy taxes that vary depending on the manufacturer and the extent of the respective subsidies.
A safeguard measure—such as the one apparently planned for hybrid cars—can be implemented much more quickly. The EU Commission seems to consider the conditions for this to be met, as imports of hybrids from China surged from 3,800 vehicles in October 2024 (the date when anti-subsidy tariffs on electric cars took effect) to around 50,000 units by July 2026.
Sefcovic on Talks in Beijing
EU Trade Commissioner Maros Sefcovic is expected to meet with Chinese Trade Minister Wang Wentao in Beijing on Thursday and Friday. The outcome could influence the plans. We will update this article as soon as there are new developments from Beijing.
According to reports in the “Handelsblatt,” Sefcovic and his team intend to try once again during talks in Beijing to persuade China to restrict its exports of hybrid cars and electric vehicles to the EU. “This deal would at least temporarily curb the rise in Chinese car exports,” said Bernd Lange, an SPD politician and chairman of the Trade Committee in the European Parliament, as quoted by the newspaper. “The goal is to flatten the import curve and give Europe’s automotive industry time to get its house in order.”
Japan deal as a model?
According to “Handelsblatt,” a model for such an agreement could be the deal Europe struck with Japan about 40 years ago. Japan restricted exports from its growing automotive industry to Europe, but in return, Toyota, Nissan, and Honda built factories there. This created jobs not only in the factories themselves but also among suppliers. A similar approach is already evident among Chinese manufacturers: BYD will begin mass production at its new plant in Szeged, Hungary, this year, Chery is already manufacturing vehicles together with Ebro in Barcelona, and Xpeng is at least having its electric cars assembled using the SKD method at Magna Steyr in Graz.