The European Union and China have reached what Brussels describes as an understanding to cut Chinese exports of hybrid cars to Europe by half. EU trade commissioner Maroš Šefčovič announced it on 9 October after two days of talks in Beijing with Chinese commerce minister Wang Wentao.
The two sides’ accounts do not match. Šefčovič said the deal would halve exports of full and plug-in hybrids, improve market access for EU companies in China and ease licensing for rare-earth exports. China’s commerce ministry gave no figures. It said only that the understanding followed intensive consultations and is consistent with WTO rules.
How hybrids became the problem
When the EU imposed countervailing duties on Chinese battery-electric cars in 2024, ranging from 7.8% to 35.3% on top of the standard 10% tariff, hybrids were not covered. Chinese manufacturers shifted their exports accordingly.
According to figures reported by the Financial Times, EU imports of Chinese hybrids rose from about 3,800 vehicles in October 2024 to around 50,000 in July 2026, while average prices fell. Chinese brands now hold more than a third of the EU hybrid market.
From safeguards to a deal
Before the Beijing talks, the European Commission had been weighing temporary safeguard tariffs, a tool that does not require proof of unfair subsidies. Brussels asked Beijing to cap Chinese brands at roughly 15% of the EU hybrid market. China refused, arguing that voluntary export restraints are not compatible with WTO rules.
The 9 October understanding appears to sidestep that objection by leaving the mechanism unstated.
“Halve” and “stable growth” can both be true, depending on which year you measure against.
Reading the numbers
Beijing describes the outcome as stable growth in exports compared with 2025. Brussels describes it as a halving. Analysts at Poland’s Centre for Eastern Studies note that the EU imported about 300,000 Chinese hybrids in 2025 and was on course for around 800,000 in 2026.
A quota of 350,000, the figure reported in the media, would sit slightly above the 2025 level while cutting the 2026 trajectory by more than half. That is our reading of the published numbers, not a confirmed term of the deal.
What happens next
Šefčovič said the understanding still needed political endorsement in Brussels, and EU leaders were due to discuss China at the European Council on 15–16 October. In parallel, work continues on price undertakings in the battery-EV case, under which minimum import prices could replace some duties. A ministerial video conference is planned for January 2027, with a third round of trade consultations in March.
Beijing’s earlier response to the EV duties, investigations into European brandy, dairy and pork, is a reminder of how quickly such disputes can spread to other sectors.
