EU seems set to cap hybrid car imports from China at 350,000 a year

The European Union seems set to cap imports of hybrid cars from China at 350,000 a year. The European Commission confirmed the limit, the Guardian reports, and a senior EU official gave the same figure to the Wall Street Journal on Monday, October 12, adding that the measure could take effect in early December. The official told the Journal the plan aims to curb Chinese hybrid and plug-in hybrid imports over the next four years and to halve China’s market share in the bloc. The Journal published its report at 3:29 a.m. Pacific time, the earliest copy this desk saved; the Financial Times reported details of the plan a day earlier, according to Automotive World, but this desk has not read the FT report.

The cap will rise by a fixed 6% a year, the Wall Street Journal reports. Automotive World, citing a document seen by Bloomberg, says the rise starts in the second year and the measure runs for four years. The Guardian says the quota comes into force in December, and Automotive World says it could start as early as December 1. Brussels will impose it under World Trade Organization safeguard rules, which, the Guardian reports, let the EU act swiftly without the kind of investigations that anti-dumping measures require.

The figures behind the move come from several sources. China’s hybrid exports to the EU tripled to €6.7bn in the first half of this year, from €2.2bn a year earlier, according to Chinese customs data cited by the Guardian. Automotive World says Chinese hybrid imports look on course to reach 800,000 this year, up from 300,000 in 2025, and that Chinese imports took 25% of the EU plug-in hybrid market and 14% of the conventional hybrid market in the first half, up from 2% in both segments in 2024, citing the European Automobile Manufacturers’ Association. The Guardian puts China’s market share at 6% and says the EU expects the quota to halve it. EU Insider cites reported figures of about 3,800 Chinese hybrid imports in October 2024 and around 50,000 in July 2026.

Officials and reporters disagree on what happens to cars beyond the cap. The Guardian reports that cars imported above the quota would not face tariffs but would remain blocked in customs at docks in Europe; Automotive World describes that account as coming from EU officials. Automotive World notes that the Financial Times reported a day earlier that steep supplementary tariffs would apply, and says the two outcomes would differ materially. This desk could not confirm which version the final legal text will carry.

The cap turns on where a car gets built, not who builds it, according to the Guardian and Automotive World. Officials told the Guardian that Chinese vehicles assembled within the EU, such as those made in Hungary or, in future, Spain, will not count toward the quota, but cars that EU companies make in China will. Automotive World says the safeguard covers hybrid imports from every source, including free-trade partners, with exemptions only for the European Economic Area, Ukraine, Kenya and small developing exporters. One EU official estimated the measure would cut 2027 imports by 500,000 to 700,000 vehicles and reduce the trade deficit by €10bn to €14bn, Automotive World reports.

The deal grew out of talks in Beijing on October 8 and 9 between EU trade commissioner Maroš Šefčovič and Chinese commerce minister Wang Wentao, CnEVPost and EU Insider report. In remarks published by the European Commission, Šefčovič said: “First, we have reached a shared understanding to moderate China's exports of hybrids and plug-in hybrids to the EU. This opens the prospect of cutting China's exports by more than a half.” He described the trade deficit as “a mountain of a challenge for the EU,” and added: “It is a crucial first step – but only a first step – in the process of rebalancing.” Reuters, in a report carried by Euronext, says the gap with China amounts to over €1 billion a day.

Beijing describes the deal in different terms, CnEVPost reports. In a statement on Monday, China’s commerce ministry said the arrangement allows growth from the 302,000 hybrid vehicles the EU imported from China in 2025, up from 107,000 in 2024, citing Eurostat data, CnEVPost reports. The ministry said China’s quota would not fall below that of any other source of EU imports, and it did not disclose specific quotas or a timeline, according to CnEVPost. Automotive World quotes the ministry saying the deal ensures “export space and stable growth for Chinese companies,” and adding: “China reserves all rights to resort to dispute settlement and demand trade compensation within the WTO framework.” The 350,000 figure reported by the Guardian and the Journal sits above the ministry’s 302,000 for 2025, while Automotive World describes it as less than half of the 800,000 expected this year; CnEVPost notes that Šefčovič did not specify the baseline for his “more than a half” estimate.

The deal also covers Chinese tariffs on EU goods. Šefčovič said the two sides reached a shared understanding on lower tariffs for a series of EU products, “from car parts to olive oil and footwear, totalling almost 4 billion euros in current export value, which would bring at least 225 million euros in duty savings,” according to the Commission’s text. The Guardian reports that China will drop some tariffs on auto parts and halve duties on footwear, olive oil and ice-cream from the EU. An EU official told the Guardian: “We will continue the dialogue on some products … this is by no means the end of the story.”

Final approval still lies ahead. Šefčovič said Commission President Ursula von der Leyen will assess the outcomes and discuss next steps with leaders at the upcoming European Council, adding: “That is where the final decision lies.” EU Insider says EU leaders will review the deal in Brussels on October 15 and 16, and the Guardian reports that EU leaders will also discuss on Thursday a French-German proposal for a “kill switch” instrument to block certain goods from the single market. Andrew Small, director of the Asia programme at the European Council on Foreign Relations, told the Guardian: “I think if China had offered a deal like this earlier in the year, say in spring, it would have been much easier to take the heat out. My sense is that things have now moved somewhat too far politically.”