China and the European Union have reportedly reached an understanding on trade in hybrid vehicles, seeking to bring the issue into line with World Trade Organization rules and avoid possible additional tariffs. The agreement was announced in a joint statement on Oct. 9, after the second plenary meeting of the China-EU trade and investment consultation mechanism. The specific measures remain undisclosed, and still require European procedural steps before they are finalized and published.
European Commission trade commissioner Maroš Šefčovič said the arrangement is intended to address the rapid growth of Chinese hybrid exports to Europe. He said that, over the next four years, exports are expected to be more than 50% below the Commission’s earlier projections—a forecast reduction involving millions of vehicles. He stressed that this does not mean current export volumes will immediately be cut in half. Šefčovič said he must report the negotiation results to the Commission president and EU member-state leaders before implementation details are finalized.
China Passenger Car Association figures show that China exported 1.56 million complete vehicles to the EU in the first eight months of 2026. That included 630,000 EVs, 490,000 plug-in hybrids and 270,000 conventional hybrids, up 49%, 179% and 142% year on year, respectively. The European Automobile Manufacturers’ Association said Chinese brands held 14% of Europe’s hybrid market in the first half of 2026, including 25% of the plug-in hybrid segment, compared with 2% across these segments in 2024. German industry group VDA welcomed the understanding, while the China Chamber of Commerce to the EU said it hoped the arrangement would provide businesses with a clearer compliance framework.