The European Union (EU) has requested China to voluntarily reduce its exports of hybrid cars to Europe by 15%, according to a report by the Financial Times citing three sources. This move comes as Chinese hybrid vehicles rapidly gain market share in Europe, prompting the EU to take action.
Sources indicated that ahead of high-level trade talks scheduled for next month in China, the EU has demanded that the volume of hybrid car exports to the EU be limited to 15% of the market size. Currently, one-third of hybrid vehicles sold in Europe are from China, meaning the EU is asking for a reduction to half of the current export levels.
Additionally, the EU has warned that if China does not voluntarily cut its hybrid car exports, tariffs on Chinese vehicles could be increased. An EU official stated, "If they (China) do not limit their exports to our market, we will impose restrictions. This is to prevent deindustrialization. We must take action." The official also noted that the EU is requesting China to refrain from aggressive exports not only in the automotive sector but also in chemicals and steel, while encouraging China to purchase more EU products.
The Financial Times highlighted that the influx of low-cost Chinese hybrid cars has put European automakers in a precarious position. An EU official remarked that with Chinese hybrid car exports to Europe reaching record highs in the second quarter, the justification for EU action is "immense."
Since October 2024, the EU has raised tariffs on Chinese electric vehicles to as much as 45%, while maintaining a 10% tariff on hybrid cars. During this period, imports of Chinese hybrid vehicles into the EU surged from 3,800 units in October 2024 to around 50,000 units by July this year, more than a tenfold increase.
Ursula von der Leyen, President of the European Commission, stated in a speech to the EU Parliament the previous day that the EU's trade deficit with China amounts to €1 billion (approximately $1.6 billion) daily, indicating that the trade relationship has reached a "tipping point" and that a "second China shock has already begun." She emphasized, "We will mobilize all available means to rebalance this relationship. While words are important, actions are even more crucial."
Another EU official explained that what the EU seeks from China is akin to the agreement Japan made in 1986 to limit its car exports to Europe. At that time, Japanese automakers, popular in the global market, agreed to restrict exports to the U.S. and Europe, which led to increased investment in Europe and collaboration with European automakers.
Meanwhile, Chinese automotive companies are also showing signs of establishing production bases in Europe. BYD is currently constructing a car factory in Hungary and plans to begin local production next year.
In June, the EU and China agreed to engage in three months of negotiations regarding trade imbalances, aiming to achieve "substantial results" by October.
* This article has been translated by AI.
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