Chinese Hybrids Are Flooding Europe

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Brussels shut the door on Chinese electric cars with punitive tariffs, and the automakers simply climbed in through the window with a gas engine on board. Since the tariffs took effect, sales of Chinese hybrid cars in the European Union have exploded, according to Eurostat data reported by The Guardian. Alarm bells are ringing in Brussels and at Europe’s carmakers.

From 659 to 160,000

The numbers show how quickly the market has turned:

• Full hybrids: In 2022, just 659 Chinese-made full hybrids were sold in the E.U. In the first seven months of this year, the figure was 160,662.
• Plug-in hybrids: Sales rose from 56,706 in all of 2022 to 217,764 from January to July alone.
• The overall market: Hybrids now account for almost 37 percent of the E.U. car market, according to the European Automobile Manufacturers’ Association, ACEA, while fully electric cars make up just over 21 percent.

The Tariff Loophole

The reason for the boom lies in Brussels itself. In 2024, the E.U. imposed countervailing duties on fully electric cars from China, arguing that state subsidies gave them an unfair advantage. Depending on the manufacturer, Chinese electric cars now face total tariffs of up to 45 percent. Hybrids were left out of the measure and are still subject to the standard 10 percent rate.

The automakers reacted swiftly and began shipping more plug-in and full hybrids to Europe. They already have the technology: plug-in hybrids have been best sellers in their home market for years.

BYD Is Catching Up With Geely

According to ACEA, three Chinese automakers are growing especially fast: BYD, Chery and Leapmotor are all posting triple-digit growth. An overview:

• Geely: The group, which also owns Volvo and Polestar, remains the most popular Chinese brand in the E.U., with 205,000 cars sold in the first eight months, up 8 percent.
• BYD: The electric car giant is closing in fast, with 177,000 vehicles sold, up 163 percent.
• SAIC: The parent company of MG is also ahead of Tesla.

Elon Musk’s Tesla sold just 142,000 cars in the E.U. in the first seven months, falling behind three Chinese groups. Europeans still lead by a wide margin, however: the Volkswagen Group alone sold about two million cars in the first eight months.

Brussels Threatens Quotas

The European Commission has asked China to voluntarily curb its hybrid exports. Otherwise, safeguards are likely, most probably in the form of quotas. Germany’s shift is notable: the German Association of the Automotive Industry, VDA, signaled for the first time that it would be open to tariffs specifically on Chinese hybrids. Where unfair conduct is proven, “the use of WTO-compliant trade defence instruments must be considered,” the association said. Until now, the German car industry had warned against tariffs for fear of retaliation in China.

The dispute is part of a larger conflict. The E.U. runs a trade deficit with China of €1.18 billion a day, which Ursula von der Leyen, the president of the European Commission, has called a “tipping point.” In early October, the E.U. trade commissioner, Maroš Šefčovič, will meet his Chinese counterpart, Wang Wentao, to explore a truce.

For the climate, the hybrid boom is a dubious development. Studies by the International Council on Clean Transportation show that plug-in hybrids emit several times their official CO₂ figures in everyday use, because many drivers rarely plug them in.