Chinese electric vehicle (EV) manufacturers, including BYD and Chery, are significantly increasing their sales of plug-in hybrid electric vehicles (PHEVs) in the European Union (EU) to circumvent high import tariffs imposed on battery-electric vehicles (BEVs). This strategic shift comes in response to the EU’s implementation of provisional tariffs in July 2024 and full tariffs of up to 45.3% in November 2024 on Chinese-made BEVs.
According to data from research firm Rho Motion, BYD sold 3,269 PHEVs in the EU in March 2025, up from zero in July 2024, while Chery sold 757 PHEVs in the same period. These figures highlight the rapid adoption of PHEVs by Chinese automakers as a means to maintain competitiveness in the European market.
The EU’s tariffs on Chinese BEVs have significantly increased the cost of exporting these vehicles to Europe. For instance, BYD faces a 27.5% tariff on BEVs, amounting to €10,257 per Atto 3 unit sold in Germany. In contrast, PHEVs are subject to a lower 10% tariff, resulting in a cost of €3,999 per Seal U unit. This substantial difference in tariffs has incentivized Chinese automakers to prioritize PHEV exports.
BYD has announced plans to introduce two additional PHEV models in Germany in 2025, expanding its hybrid offerings in response to varying European consumer preferences and the need to offer alternatives to fully electric vehicles. The company is also restructuring its European operations to enhance distribution, customer support, and localized marketing.
Other Chinese automakers, such as Nio and Leapmotor, are also adjusting their strategies in light of the EU tariffs. While Nio and Leapmotor remain committed to the European market, they face challenges, including delays in product launches and distribution hurdles. Despite these obstacles, manufacturers like BYD and Zeekr remain optimistic, with plans to expand their presence in Europe through hybrid models and localized production.
The EU and China are currently engaged in discussions to address the trade dispute, with the aim of finding a fair resolution that supports healthy competition. In the meantime, Chinese automakers are leveraging the lower tariffs on PHEVs to maintain their foothold in the European market, highlighting the dynamic nature of global trade and the automotive industry adaptability.
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