A BYD Sealion 06 SUV on display at the Beijing Auto Show in April 2026. Credit: CnEVPost
- The European Commission prepares countervailing duties on Chinese plug-in hybrids, with an investigation already under way, according to Handelsblatt.
- The EU has imposed additional tariffs on BEV imports from China since October 2024.
The European Union is preparing to impose tariffs on plug-in hybrid vehicles (PHEVs) imported from China in the coming weeks, German newspaper Handelsblatt reported on Friday, citing senior EU officials and industry sources.
The move aims to offset the market-distorting effects of Chinese subsidies, with the European Commission targeting additional countervailing duties on models from Chinese manufacturers such as BYD (HKEX: 1211), Chery (HKEX: 9973) and SAIC Motor (SSE: 600104), according to the report.
The plan would close a gap in the current trade barriers. Since October 31, 2024, the EU has imposed additional tariffs on battery electric vehicle (BEV) imports from China.
The measures stemmed from an anti-subsidy investigation, in which the EU concluded that subsidies granted to Chinese manufacturers in their home market distorted competition.
PHEV models, however, had so far been excluded from these measures.
Under the current framework, manufacturer-specific duties are added on top of the standard 10% import tariff.
For example, BYD vehicles are subject to an additional 17% duty, bringing the total rate to 27%. Geely Auto (HKEX: 0175) faces an additional 18.8% tariff, for a total of 28.8%. SAIC, the parent company of MG, bears the highest additional rate of 35.3%, taking the total import duty to 45.3%.
PHEVs, by contrast, are subject only to the standard 10% import tariff and are exempt from the additional duties.
Under this tariff structure, Chinese carmakers have naturally shifted toward exporting more PHEV models to the EU. In May 2026, BYD announced it had become Germany’s best-selling PHEV brand for the first time, with 4,290 new registrations that month.
Among BYD’s plug-in hybrid models, the compact Atto 2 DM-i SUV stood out in May with 2,113 new registrations, followed by the larger Seal U DM-i and the Seal 6 DM-i Touring estate. BYD recently also launched the compact Dolphin G DM-i, further expanding its PHEV lineup.
This marks a contrast with the stance taken in January, when the European Commission denied any intention to impose tariffs on Chinese hybrids.
According to the latest Handelsblatt report, the European Commission plans to impose countervailing duties on Chinese hybrid vehicles in the coming weeks.
The report said an anti-subsidy investigation is believed to be already under way. EU heads of state and government were scheduled to vote on the matter at the EU summit on Thursday evening, though the outcome of the vote remains unknown.
On Thursday, EU leaders discussed new measures needed to curb the bloc’s widening trade deficit with China. The bloc’s heavy reliance on the world’s second-largest economy for critical supplies such as rare earths was also on the agenda.
Both sides agreed it is necessary to provide general guidance on price undertakings for Chinese exporters shipping passenger BEVs to the EU.
