The European Union will impose a four-year safeguard measure beginning December 1, capping annual imports of hybrid and plug-in hybrid vehicles from China at 350,000 units, according to an announcement by the European Commission.
The cap represents roughly a 50% reduction from current Chinese hybrid vehicle imports, which stand at approximately 800,000 units annually. Under the agreement, the allowable imports will increase by 6% each year, providing a phased approach to market adjustment.
The move comes as Europe’s automotive sector faces mounting pressure from Chinese manufacturers who have rapidly shifted focus to hybrid exports following EU tariffs on Chinese-made electric vehicles introduced in 2024. European automakers have struggled with delays in their own EV transitions and weakening overall demand, making the surge in affordable Chinese hybrids an additional competitive challenge.
To comply with World Trade Organization non-discrimination rules, the cap will apply to all import sources, not just China. This means countries with free trade agreements with the EU will also face the same restrictions, with China’s quota set no lower than caps applied to other nations.
The safeguard measure—an emergency import restriction permitted under WTO rules—emerged from negotiations between Chinese and European trade officials. China’s Commerce Minister Wang Wentao and EU Executive Vice-President Maroš Šefčovič, who oversees trade, held discussions in Beijing on October 8–9, resulting in a joint statement indicating both parties had reached an understanding on hybrid vehicle trade consistent with WTO regulations.
As part of the broader agreement, China also agreed to reduce tariffs on certain European goods, including automotive parts and olive oil. The tariff reductions will provide European exporters with at least €225 million (approximately $252 million) in relief from tariff burdens.
The gradual 6% annual increase in the cap is designed to prevent sudden supply disruptions while allowing European industry time to adapt to market conditions. European Commission officials framed the measure as opening the possibility of more than halving Chinese hybrid exports to the EU market.
Following implementation, Chinese-made hybrid vehicles are expected to represent half their current share of new car sales in the EU.
The agreement marks a rare moment of resolution in increasingly tense EU-China trade relations, which have been strained over electric vehicle tariffs and broader economic competition. Both sides appear willing to pursue negotiated solutions to trade disputes rather than escalating tariffs and restrictions.
