The European Union is now considering imposing special tariffs on Chinese plug-in hybrids.

Since the end of 2024, the European Union has applied special tariffs to battery electric vehicles (BEVs) manufactured in China to offset subsidies that, according to Brussels, distort competition. However, plug-in hybrids (PHEVs) had until now been exempt from these measures, which has allowed Chinese manufacturers to take advantage of this regulatory loophole to boost sales of this type of vehicle in the European market.

The special tariffs came into force on 31 October 2024, on top of the general 10 per cent import duty. For example, BYD pays an extra surcharge of 17% (27% in total), Geely an additional 18.8% (28.8% in total), and SAIC (owner of MG) faces the highest additional duty of 35.3%, which raises its total tariff to 45.3%.

Faced with this situation, Chinese brands quickly redirected their strategy. Rather than focusing solely on fully electric vehicles, they increased their offering of plug-in hybrids, which are subject only to the basic 10 per cent tariff. The results were not long in coming. In May 2026, BYD became the leading PHEV brand in Germany for the first time, with 4,290 new registrations. Its most successful model was the compact SUV Atto 2 DM-i, with 2,113 units, followed by the Seal U DM-i and the estate Seal 6 DM-i. Recently, the brand expanded its range with the Dolphin G DM-i.

There is an imbalance in the European market in favour of plug-in hybrids that needs to be corrected

This shift is particularly significant, as evidenced by the fact that around 70 per cent of BYD’s registrations in Germany were plug-in hybrid vehicles, while only 30 per cent were pure electric vehicles. Although this data relates to one manufacturer and one specific country, it reflects a broader trend across the European Union.

Given the strong shift towards PHEVs, the European Commission has decided to act. According to a recent report, Brussels is preparing countervailing duties on Chinese hybrids in the coming weeks. In order to neutralise the effect of the subsidies, an anti-subsidy investigation is already reportedly under way. Everything points to the new duties being specific to each manufacturer, although probably more moderate than those applied to pure electric vehicles, since in PHEVs the battery represents a smaller share of the vehicle’s value.