“Cut by more than half”: EU agrees with Beijing on upper limit for hybrid car imports

Since Brussels imposed special tariffs on electric cars from China, the country has been selling significantly more plug-in hybrids to Europe. Now an agreement is supposed to cap imports; an EU official speaks of 350,000 cars a year. However, Brussels does not comment on one point.

The EU wants to support its car manufacturers and is therefore halving imports of plug-in hybrids from its competitors from China. In the future, only 350,000 hybrid cars will be allowed to be sold from China to the EU each year, an EU official in Brussels announced. "This will cut current imports into the EU by more than half," he said. The EU and China agreed on a limit last week.

The EU fears that Chinese cars could drive European manufacturers out of the market because they are cheaper. The EU has therefore already imposed special tariffs on electric cars from China in 2024. Since then, China has been selling significantly more plug-in hybrids to Europe. The EU Commission estimates that the number could rise to around 800,000 this year, according to officials.

In the future, European customs authorities will no longer approve hybrid cars from China once the annual upper limit has been reached. It should be 350,000 cars in the first year and increase by six percent every year thereafter, so the limit will expire after four years. According to the official, the EU is thus complying with the rules of the World Trade Organization (WTO).

The upper limit applies to all plug-in hybrids from China, regardless of who produced them. It also affects European manufacturers who have their cars assembled in China. Chinese carmakers with plants in other countries such as Turkey are not affected.

“China has agreed to this,” emphasized another official in Brussels. EU Trade Commissioner Maros Sefcovic and Chinese Trade Minister Wang Wentao had already announced an agreement after their meeting on Friday, but did not give any details. Sefcovic spoke in Beijing of an "important first step" to restore balance in trade between the two sides.

According to Sefcovic, China also agreed to reduce tariffs on some EU products. China also agreed to "facilitate the approval of export licenses for rare earths and permanent magnets for the EU," it said in a joint statement.

Brussels has not yet commented on concessions to Beijing as part of the agreement. China agreed because both sides had found a solution within WTO rules, one of the officials suggested. Given the EU's large trade deficit, it was clear that something had to change.

The EU imports significantly more goods from China than the other way around. European companies also rely on raw materials, semiconductors and renewable energy materials from China. At the end of the week, the EU heads of state and government also want to discuss the tense trade relations. You also want to be prepared for a possible escalation.

The EU Commission is preparing several new laws for this purpose. One of them is intended to oblige companies in some industries to source their raw materials and components not just from a single supplier, but from several countries. Another is to ensure that the EU can completely cut off a country from the European market in an emergency.

Meanwhile, negotiations between Brussels and Beijing are set to continue, and the EU hopes for further restrictions on Chinese goods. Sefcovic and Wang want to speak on the phone again in January; according to information from Brussels, the next meeting is planned for March.