SHANGHAI (Reuters) – China’s automakers are ramping up hybrid vehicle exports to Europe and planning more models for the key market, exposing the limits of the European Union’s electric vehicle tariff scheme.
The bloc’s latest EV tariffs do not apply to hybrid cars to protect its auto industry from a flood of cheap Chinese imports. Analysts say this could lead to major brands such as China’s top EV maker BYD continuing to expand in the region.
Some manufacturers are shifting production and assembly to Europe to reduce costs around tariffs.
Murtuza Ali, an analyst at Counterpoint Research, said, “This increase is driven by Chinese OEMs moving to PHEVs (plug-in hybrids) as a way to sidestep new EU tariffs on BEV (battery-powered EVs) imports from China. is gone.”
He expects China’s hybrid exports to Europe to grow by 20% this year and even faster next year.
EU tariffs of up to 45.3% on Chinese EV imports took effect in late October in what the European Commission says are unfair subsidies that help China create an additional 3 million EVs per year in production capacity, the EU market’s Twice the size.
Anti-subsidy investigations into Chinese EV imports, which began in October 2023, and slowing car sales in China from an economic slowdown have prompted some automakers to shift their European strategy to focus more on hybrid exports. has spurred change, the data shows.
Hybrid cars, which run on a combination of gasoline and electricity, are gaining popularity as buyers see them as an affordable compromise between all-combustion and all-electric.
From July to October, hybrid exports to Europe tripled to 65,800 units from the same period a year ago, reversing sales trends earlier this year and into 2023, according to data from the China Passenger Car Association. .
That helped exports of plug-in hybrids and conventional hybrids account for 18% of China’s total vehicle sales in Europe in the third quarter, more than double from 9% in the first quarter. However, the proportion of EV shipments fell from 62% to 58% during the same period.
The trend is likely to gain further momentum.
Analysts say China, which overtook Japan as the world’s biggest auto exporter last year, is ramping up its export drive to address overcapacity at home, aided by its dominance in EVs.
Given the 100% tariffs on Chinese-made EVs in the United States and Canada, Europe is also one of the most obvious outlets for Chinese auto makers.
The European Commission did not immediately respond to a request for comment on rising hybrid imports from China.
