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

The European Union is opening another front in its car trade fight. Handelsblatt reported that the European Commission is preparing countervailing duties on plug-in hybrids (PHEVs) imported from China, and that the proceeding is already under way. The aim 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. The rates are added to the standard 10 percent import duty and depend on the manufacturer. BYD pays an extra 17 percent, 27 percent in total. Geely Auto pays 18.8 percent, 28.8 percent in total. SAIC, the owner of MG, pays the highest rate, 35.3 percent, or 45.3 percent in total. Plug-in hybrids had until now been excluded from those additional charges and paid only the 10 percent rate.

The effect was predictable. Chinese manufacturers shifted their exports to the EU towards 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 among the models, with 2,113 registrations, ahead of the Seal U DM-i and the Seal 6 DM-i Touring estate. The company also brought out another model in that family, the compact Dolphin G DM-i.

The Cupra precedent

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

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

The dispute is entering a more technical phase. Instead of a uniform tariff, there is a negotiating game over minimum price levels and quotas. For importers this means rising administrative costs and greater unpredictability in setting showroom prices.