BRUSSELS, Oct 12: The European Union will cap imports of hybrid vehicles from China to 350,000 a year, a senior EU official said Monday, after Brussels and Beijing agreed to moderate their entry to the bloc.
"This will cut by more than half the current exports to the EU, which we estimate are likely to reach up to 800,000 units in 2026," the official said.
The cap will apply from 2027 for a period of four years, and will rise by six percent annually from the second year onward.
The EU will use its safeguard measure, which allows the bloc to limit imports to stop the flood of a certain product to Europe.
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The subject of hybrid vehicles is sensitive because these models have become one of the main routes through which Chinese manufacturers enter the EU market.
The EU in 2024 set hefty additional tariffs on Chinese electric cars, alleging they benefit from unfair state subsidies.
Brussels and Beijing agreed to "moderate" China's exports of hybrids and plug-in hybrids to the EU last week, but details of the plan were not immediately made public.
The Chinese commerce ministry said Monday that Europe imported 302,000 hybrid vehicles in 2025 and that last week's deal would be based on such levels.
"The two sides reached a rising arrangement based on 2025, ensuring export space and stable growth for Chinese enterprises," the ministry said.
The agreement was struck last Friday after European trade commissioner Maros Sefcovic held two days of talks in Beijing to avert a damaging trade war.
The EU is increasingly worried about rising imports from China as its trade deficit with the Asian giant runs at around one billion euros ($1.1 billion) every day.
Many in Europe accuse China of unfair trade practices, including price dumping, currency manipulation and supporting companies with huge subsidies, which officials and companies say is undermining EU firms and leading to job losses.
China rejects the claims, pointing to its industrial prowess.
The export deal will be on the agenda of a meeting of EU leaders on Thursday, during which they will explore what next steps Europe should take.
A second EU official said Brussels was working on a so-called solidarity tool to support an industry or region if they are hit by unfair practices, and a "diversification" instrument to encourage firms to diversify their suppliers.