Electrive — 2026-10-11
News from Brussels
EU Trade Commissioner Maroš Šefčovič announced the agreement on Friday following two days of talks with China’s Minister of Commerce, Wang Wentao, in Beijing. The understanding is part of a broader package aimed at rebalancing trade relations between the two sides, and its impact extends beyond the automotive industry. For the EU, it is also about curbing China’s growing trade surplus and protecting European industry from additional competitive pressure.
Šefčovič stated: “In the case of, hybrids and plug-in-hybrids, we are talking about, reducing the exports from China to European Union over 4 years by several million cars, which I think it’s pretty significant.” However, the EU Commissioner was not referring to the current import level, which recently stood at around 50,000 hybrids and plug-in hybrids from China per month. It is likely that the EU Commission has forecast further growth in this segment and aims to halve future volumes—but Šefčovič declined to elaborate on this during a media round. The technical details of the agreement are also still pending; the EU Trade Commissioner said he first wanted to inform the heads of state and government, EU institutions, and member states.
EU leaders must still review the agreement
The agreement follows a period of increasing tensions in automotive trade. After the EU introduced high anti-subsidy tariffs on fully electric cars from China in October 2024, in addition to the regular 10 per cent duty on cars, hybrid and plug-in hybrid models gained significant importance for Chinese manufacturers in Europe, and delivery figures multiplied. This is because these vehicles are currently subject only to the standard 10 per cent tariff—making imports significantly cheaper than for pure electric vehicles.
Brussels therefore saw the risk that competitive pressure on European manufacturers would increasingly shift to this market segment. According to the European Automobile Manufacturers’ Association (ACEA), the market share of Chinese brands in Europe for hybrid vehicles reached 14 per cent in the first half of 2026 (compared to 2 per cent in 2024), and for plug-in hybrids, it was even 25 per cent (also compared to 2 per cent in 2024).
China had initially rejected a voluntary limit on its hybrid exports, after which the EU reportedly considered using the so-called Safeguard Instrument. This allows for special tariff quotas in the event of a sudden surge in imports of a product category and resulting or threatened serious harm to European manufacturers. Within a defined import volume, existing tariffs apply, but an additional levy can be imposed beyond that. This is intended to slow imports of the product category to a lower level. However, there was no official confirmation from the EU—while the timing of the agency report suggested that informants wanted to create public pressure during the negotiations.
The results of the negotiations with China are now to be evaluated at the European Council on 15 and 16 October. According to Šefčovič, the Commission will then initiate the necessary procedures if EU leaders support the agreement. He emphasised that while the negotiations represented an important first step, work on a more balanced trade relationship must continue.
Concrete implementation remains to be seen
The European automotive industry welcomed the agreement. The industry association ACEA described it as a positive step towards easing trade tensions but noted that the concrete details still need to be clarified.
“A sharp and sudden destabilisation of the market in Europe, along with price wars that mirror the current market situation in China, would be highly disruptive to the European economy as whole” said Sigrid de Vries, Director-General of ACEA. “Today’s announcement can help facilitate the transition to a new era of Chinese presence in the European market in an orderly way and this is in the long-term interests of all parties.”
The key will be how the announced export reduction is implemented and monitored. EU Trade Commissioner Šefčovič described the talks as a first step towards a more balanced trade relationship. The EU and China intend to continue their consultations: another ministerial-level exchange is planned for January, and the next comprehensive round of trade and investment talks is scheduled for March 2027. Until then, the focus will likely be on the practical implementation of the hybrid agreement.