Chinese EV makers push plug-in hybrid sales in the EU

Chinese automakers BYD and Chery have increased sales of plug-in hybrid electric vehicles (PHEVs) in the European Union.

This shift comes in response to high tariffs on battery-electric vehicles (BEVs).

According to research firm Rho Motion, BYD sold 3,269 PHEVs in March 2025, a rise from zero in July 2024, when provisional tariffs were first imposed.

The EU introduced tariffs of up to 45.3% on Chinese-made BEVs in November 2024 to limit the influx of low-cost vehicles.

Chery, which faces a base tariff of 10% and an additional 21.3% on BEVs, sold 310 BEVs and 757 PHEVs in March 2025.

This move aligns with a broader strategy among Chinese automakers to navigate high tariffs and address slower-than-expected BEV adoption in Europe.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ The EU-China tariff dance reveals patterns from previous automotive trade wars

The current shift by Chinese automakers to sell more PHEVs is part of a familiar pattern in global automotive trade tensions, where manufacturers adapt product strategies to navigate tariff barriers.

This mirrors earlier trade conflicts where automakers adjusted their strategies to circumvent tariffs, with the automotive sector being particularly targeted in trade disputes due to its economic significance and visibility 1.

The EU tariffs on Chinese EVs are reminiscent of previous trade measures, with similar tariff structures (the EU’s maximum import surcharge is 35.3%) creating predictable market responses 2.

Trade history shows that tariffs typically lead to three industry responses: market exits, local production investments, or product mix adjustments – with BYD and Chery choosing the third option by pivoting to PHEVs which face only a 10% tariff versus up to 45.3% for BEVs 3.

The scale of adaptation is significant, with plug-in hybrid imports from China surging by 892% in early 2025, demonstrating how quickly manufacturers can shift production priorities when faced with trade barriers 4.

2️⃣ The PHEV workaround exposes structural limitations in EU’s EV policy framework

The rapid shift to PHEVs by Chinese manufacturers highlights a critical gap in the EU’s automotive trade policy, where different propulsion technologies face vastly different tariff rates despite similar competitive impacts.