EU prepares tariffs on Chinese plug-in hybrids, Cupra Tavascan already exempt

The European Union is widening its trade front in the automotive sector. According to the German newspaper Handelsblatt, the European Commission is preparing countervailing duties on plug-in hybrids (PHEVs) imported from China. The proceeding is already under way. The goal is to offset the effects of Chinese subsidies. The duties would cover models from BYD, Chery and SAIC Motor, among others.

A gap in the tariffs

Since 31 October 2024, the EU has imposed additional duties on imports of purely electric cars (BEVs) from China. These rates are added to the standard 10 percent import duty and depend on the manufacturer. BYD pays an extra 17 percent, for a total of 27 percent. Geely Auto pays 18.8 percent, for a total of 28.8 percent. SAIC, the owner of MG, pays the highest rate: 35.3 percent, or 45.3 percent in total. Plug-in hybrids were previously excluded from these additional charges and subject only to the 10 percent rate.

The result was predictable. Chinese manufacturers shifted their exports to the EU toward PHEV models. In May 2026, BYD reported that it had become the best-selling plug-in hybrid brand in Germany for the first time, with 4,290 registrations that month. The compact SUV Atto 2 DM-i stood out, with 2,113 registrations, ahead of the Seal U DM-i and the Seal 6 DM-i Touring estate. The company also launched another model in that family, the compact Dolphin G DM-i.

The Cupra precedent

Running in parallel is the price undertaking mechanism, which guarantees a minimum export price instead of paying the duty. On 11 February 2026, the European Commission accepted a price undertaking from Volkswagen Anhui. This exempted the China-built SUV Cupra Tavascan from import duties. The application was submitted in December 2025, marking the first formal revision of tariffs on Chinese electric cars. The rate for Cupra had been 20.7 percent.

Earlier, on 12 January 2026, China and the EU reached a consensus on general guidelines for price undertakings for Chinese passenger car exporters. The China Chamber of Commerce to the EU (CCCEU) noted that some Chinese manufacturers are considering submitting their own undertaking proposals. It called for equal treatment of Chinese companies with more complex export structures.

The dispute is entering a more technical phase. Instead of a uniform tariff, negotiations now focus on minimum price levels and quotas. For importers, this means rising administrative costs and greater uncertainty in setting showroom prices.