The European Union is reportedly asking China to voluntarily limit its exports of hybrid cars to the European market as Brussels seeks to protect domestic manufacturers while avoiding a wider trade confrontation with Beijing.
European officials want Chinese-made hybrid vehicles to account for no more than approximately 15% of the EU market. The proposed limit would represent a significant reduction from their current share, which has risen rapidly as European consumers turn toward more affordable alternatives to fully electric and conventional vehicles.
The initiative comes amid growing concern that heavily supported Chinese manufacturers could weaken Europe’s automotive industry. European companies, particularly those in Germany and France, are under pressure from rising production costs, slower demand, technological competition, and an influx of lower-priced vehicles manufactured in China.
In 2024, the EU imposed additional anti-subsidy tariffs on Chinese electric vehicles. However, most hybrid models remained subject to a substantially lower tariff, creating an opening that contributed to a sharp increase in Chinese hybrid exports to Europe.
Brussels is now seeking a negotiated arrangement rather than immediately imposing additional trade restrictions. Alongside limits on hybrid vehicles, European officials are reportedly pressing China to purchase more European products and address imbalances affecting other industries, including chemicals.
The EU’s trade deficit with China reached approximately €360.6 billion in 2025 and continued to grow in 2026. European Commission President Ursula von der Leyen has warned that the imbalance is becoming unsustainable and could contribute to further deindustrialisation across the bloc.
Germany has also called for stronger measures. Vice Chancellor and Finance Minister Lars Klingbeil urged the EU to consider extending tariffs to Chinese plug-in hybrids and tightening local-content requirements to support European production and employment.
China has rejected European allegations that its industrial subsidies create unfair competition, describing proposed restrictions as protectionist. Beijing could respond with countermeasures targeting European exports if negotiations fail and Brussels introduces additional tariffs.
European Trade Commissioner Maroš Šefčovič is expected to lead negotiations aimed at producing tangible progress before high-level talks in Beijing. The outcome will determine whether the two sides can reach a compromise or move toward another major trade dispute.
