KATHMANDU: China and the European Union (EU) have reached an understanding that could cut Chinese hybrid and plug-in hybrid car exports to Europe by more than half over the next four years.
European Trade Commissioner Maros Sefcovic announced the agreement on October 9 after two days of talks with Chinese officials in Beijing. The discussions focused on reducing the EU’s growing trade deficit with China.
Sefcovic said the agreement could reduce Chinese hybrid car imports by several million units over four years. However, both sides are yet to disclose how the arrangement will be implemented.
Chinese vehicle imports into Europe continue to rise. Plug-in hybrid imports into the EU increased by 86% in the year to September, while prices fell by 20%. More than half of these imports now come from China.
The EU imposed additional tariffs on Chinese-made electric vehicles in 2024, but exports have started rising again this year. European automakers continue to face growing competition from Chinese brands.
The agreement also includes steps to improve market access for European products in China. Beijing has agreed to reduce import duties on around USD 4.6 billion worth of EU goods, including car parts, olive oil and footwear.
China has also agreed to facilitate export licenses for rare earths and permanent magnets, which are important for automotive manufacturing.
China’s exports to the EU reached USD 560 billion in 2025, while its imports of European goods stood at USD 268.3 billion. The widening trade gap has increased pressure on the EU to protect its manufacturers.
