EU Calls on China to Restrain Hybrid Vehicle Exports and Limit Market Share to 15%

[Financial News] The European Union (EU) has asked the Chinese government to voluntarily limit exports of Chinese-made hybrid vehicles to Europe.
On the 17th (local time), the Financial Times (FT) reported, citing sources, that the European Commission (EC) hopes to keep Chinese-made hybrid vehicles' share of the EU market at around 15%, down from its current level of more than one-third. The request is viewed as a preemptive measure to prevent an escalation of the trade war ahead of trade talks between the two sides in Beijing next month.
Europe's auto industry is facing severe business difficulties amid an onslaught from Chinese-made vehicles that compete on value for money. Volkswagen Group recently approved its 'Plan 2030,' which calls for an additional reduction of about 50,000 employees across the group. Combined with the 50,000 job cuts announced earlier this year, the company is pursuing total workforce reductions of about 100,000 by 2030.
In addition to hybrid vehicles, the EU is also calling for restraint in exports of key products such as chemicals and increased purchases of European-made goods. An EU official told the FT, "If China does not voluntarily limit its exports, we will take action ourselves," emphasizing, "This is a managed trade measure aimed at preventing Europe's deindustrialization."
Ursula von der Leyen, President of the European Commission, previously warned of a "second China shock" in her annual policy address, saying, "The trade deficit with China, which amounts to €1 billion a day—about 1.47 trillion won—has reached a tipping point."
The EU previously imposed countervailing duties of up to 45% on Chinese battery electric vehicles (BEVs) in October 2024. China retaliated by imposing tariffs on European cognac, meat and dairy products, intensifying the conflict. Imports of Chinese electric vehicles increased only slightly after the high tariffs were imposed, while imports of hybrid vehicles, which are subject only to the basic 10% tariff, surged. EU imports of Chinese-made hybrid vehicles rose from 3,800 units in October 2024 to about 50,000 in July 2026, an increase of more than tenfold.


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