THE EUROPEAN UNION is going to cap imports of hybrid vehicles from China to 350,000 a year in an effort to protect the EU market from “unfair competition”.
The move will cut the number of hybrid cars that come to the EU from China down to less than half of the current level.
The subject of hybrid vehicles is sensitive because they are among the most popular EV models for European consumers, and Chinese makers have profited from their lower-price models to gain huge market shares at the expense of European producers.
The EU and China have agreed to “moderate” China’s exports of hybrids and plug-in hybrids 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 6% 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.
The EU in 2024 set hefty additional tariffs on Chinese electric cars, alleging they benefit from unfair state subsidies.
French President Emmanuel Macron welcomed the deal, saying that it would “better protect the European market against unfair competition”.
“It’s the result of years of work where we have sought to re-establish a fair and honest competition between Europeans and non-Europeans,” he said.
The Chinese commerce ministry said Monday the deal struck last week would be based on 2025 hybrid exports to the EU of 302,000 vehicles.
“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 after European trade commissioner Maros Sefcovic held two days of talks in Beijing over a trade deficit that runs at around one billion euro every day.
China has long been accused of unfair trade practices, including price dumping, currency manipulation and state subsidies.
Officials and companies say the measures undermine EU firms and lead 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 when they are expected to explore further measures.
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.