The EU is reportedly considering including Chinese hybrid vehicles (HEVs & PHEVs) in its countervailing tariff regime, planning an additional levy of 7.8%-35.3%. Combined with the existing 10% base import tariff, the total tariff rate could reach a maximum of around 45%, matching the current rate on Chinese battery electric vehicles (BEVs) exported to the EU.
 
This move comes as China’s hybrid vehicle exports to the EU surged 155% year-on-year in 2025, a stark contrast to the 12% growth of BEV exports. The EU argues that hybrid models may also benefit from government subsidies, citing similar production conditions to BEVs, and aims to protect its domestic automakers such as Volkswagen and BMW. However, an EU trade spokesperson has clarified that no countervailing investigation into Chinese hybrid vehicles has been launched yet, stressing that internal discussions do not equate to formal tariff procedures.
 
Back in October 2025, the EU imposed an additional countervailing tariff of up to 35.3% on Chinese BEVs. The two sides reached a preliminary price undertaking agreement on Chinese BEVs in January 2026, yet the deal is not applicable to hybrid models for the time being.
 
If the proposed tariff on hybrids takes effect, Chinese automakers will face a sharp rise in export costs to the EU and a weakened price competitiveness, which may force them to accelerate local production in Europe, adjust market layout strategies. For the EU market, the tariff may protect domestic automakers in the short term but could drive up vehicle purchase costs for consumers. It also risks escalating China-EU trade frictions, as China may take retaliatory measures.
 
Notably, there is a clear divergence in global auto trade tariffs: Canada has partially scrapped high tariffs on Chinese electric vehicles, while the US still maintains a 100% tariff rate.