The European Commission is preparing to impose countervailing duties on Chinese-made plug-in hybrid electric vehicles (PHEVs), according to a June 19 report by Handelsblatt citing multiple senior EU officials and industry insiders. The necessary investigations are already fully prepared; once a majority of EU member states approves, the Commission can formally implement them within weeks. The Commission declined to comment. The target brands include BYD, Chery, and SAIC (MG), following the same framework as the current BEV tariff system – since October 2024, Chinese-made BEVs have faced additional countervailing duties of 17% (BYD) to 35.3% (SAIC) on top of the 10% base tariff, totaling up to about 45%, while PHEVs have so far only been subject to the 10% base rate. This gap has created clear regulatory arbitrage: Chinese automakers have since mid-2024 accelerated their European strategies toward PHEVs. BYD became Germany’s best-selling plug-in hybrid brand for the first time this May, with 4,290 new registrations in a single month. The EU Commission stated that the move is intended to “plug the loophole.”
The tariff preparations come the day after an EU leaders’ summit discussed expanding measures to counter Chinese economic practices, a sensitive timing. European auto industry insiders welcome the development, saying the “cheap competition channel” in the PHEV market is likely to narrow. Notably, in January of this year, the EU Commission denied any intention to impose tariffs on Chinese hybrid models. This 180-degree turn reflects how rapidly tolerance within the EU for Chinese automakers’ circumvention tactics has tightened. EU-China negotiations on price commitments for BEVs are still ongoing. If the new PHEV tariffs are enacted, they will further compress the strategic room for Chinese automakers in the EU.