EU Prepares Countervailing Duties on Chinese Plug-In Hybrids to Close BEV Tariff Loophole

The European Commission is preparing countervailing duties on plug-in hybrid electric vehicles (PHEVs) imported from China, closing a regulatory gap that has allowed Chinese automakers to sidestep the additional tariffs imposed on battery-electric vehicles in October 2024. Those BEV duties range from 17.0% for BYD to 35.3% for SAIC, applied on top of the standard 10% EU import tariff; PHEVs have so far been subject only to the 10% base rate. Chinese manufacturers — particularly BYD, Chery and SAIC — significantly accelerated PHEV exports to Europe after the BEV duties took effect. BYD became Germany's best-selling PHEV brand in May 2026, recording 4,290 new registrations; its compact Atto 2 DM-i SUV alone accounted for 2,113 of those. The planned PHEV duties are expected to be manufacturer-specific and on average lower than the BEV rates, as the battery accounts for a smaller share of value in a plug-in hybrid. The European Commission is expected to present a broader review of its trade defence instruments in the third quarter of 2026, which is likely to provide the procedural framework for the new PHEV measures.