China agrees to halve hybrid exports to EU

China has agreed to more than halve hybrid car exports to the EU over the next four years. This is reported by The Guardian with reference to the European Commissioner for Trade Maros Sefcovic.

He said the deal was the result of "intensive" talks between Beijing and Brussels that began in June. Deliveries of hybrid vehicles, including models with the ability to recharge from the grid, are expected to decline by several million units over four years.

Sefcovic called the deal unprecedented. He said China "for the first time agreed to restrict exports" before a formal trade investigation, which usually precedes the introduction of safeguard measures under World Trade Organization (WTO) rules.

The talks came amid a growing trade imbalance between the EU and China. According to Sefcovic, the European Union buys much more goods from China than it sells to it. The difference reaches €1.18 billion a day, he noted.

European authorities fear that rising imports of Chinese goods, including cars, could hurt local manufacturers and lead to job losses. As Sefcovic noted, the Chinese side understands the EU’s concern about the consequences of increased supplies.

I am pleased to report that our Chinese partners understood this weighty political argument, which enabled us to reach a negotiated solution. “This is an important first step, but only a first step,” he said, stressing that the parties will continue to work to resolve trade disputes.

China and the European Union agreed on measures to limit the supply of Chinese hybrid cars to the European market on October 9. The details of the agreement were not disclosed at the time. At the same time, the Ministry of Commerce of China reported that during the negotiations, the parties also agreed to simplify the procedure for issuing permits for the export of Chinese rare earth metals and permanent magnets to the EU. The next round of negotiations is scheduled for March 2027.

Trade disputes between the EU and China escalated in 2024, when the EU imposed additional duties on Chinese electric cars. The decision was preceded by an investigation in which the EC concluded that Chinese manufacturers benefit from “unfair” subsidies. The amount of duties ranged from 17.4% to 37.6%.

Hybrid cars from China are not subject to these duties. However, as their supplies increased, the EU began to consider additional restrictions, including tariff quotas: if cars exceeded the prescribed volume of imports, they could be subject to additional duties.

According to the Financial Times, monthly shipments of Chinese-made plug-in hybrids to Europe rose from about 3,800 vehicles in October 2024 to 50,000 in July 2026. In August 2026, Chinese brands accounted for about a quarter of hybrid car sales in Europe.