By expanding their exports of hybrid vehicles to Europe and developing new models for the significant market, Chinese automakers are highlighting the shortcomings of the European Union’s electric vehicle tariff plan.
The most recent EV tariffs set by the bloc to protect its auto industry from a flood of low-cost Chinese imports do not apply to hybrid vehicles. Analysts predict that this could result in the continued regional expansion of well-known companies like China’s top EV maker, BYD.
A number of companies are now shifting their production and assembly to Europe in an attempt to reduce tariff-related expenses.
“The surge is the result of Chinese OEMs switching to plug-in hybrids (PHEVs) in order to avoid the new EU tariffs on BEV (battery-powered EVs) imports from China,” said Murtuza Ali, an analyst at Counterpoint Research.
He predicts that China will send 20% more hybrids to Europe this year and significantly more the next year. EU tariffs of up to 45.3% on Chinese EV imports come into effect in late October in an attempt to counter what the European Commission says are unfair subsidies that allowed China to build spare production capacity for 3 million EVs annually, twice the size of the EU market.
Customers are increasingly choosing hybrid cars, which combine gasoline and electricity, as a cost-effective substitute for all-electric or all-combustion automobiles.
In contrast to the same period last year, hybrid exports to Europe more than doubled to 65,800 units between July and October, according to data from the China Passenger Car Association. This reverses a trend of declining sales that continued until early this year and in 2023.
