The European Union and China have struck a preliminary trade deal to reduce Chinese hybrid vehicle exports into the European market, de-escalating tensions in the automotive sector. Talks led by Chinese Commerce Minister Wang Wentao and EU Trade Commissioner Maroš Šefčovič hit 16 points of consensus on trade balances, export controls, intellectual property rights and reform of the World Trade Organization (WTO).
The deal comes amid continued acceleration of Chinese auto exports to Europe in 2026. Exports of plug-in hybrid vehicles from China to the EU reached 490,000 in the first eight months of the year, a 179% increase from the same period in 2025. Exports of full hybrid vehicles soared 142% on year to 270,000 units.
Also, Chinese manufacturers are growing their presence in the European market. Chinese brands took 14% of EU’s hybrid car market in the first half of 2026. More dominant still in the plug-in hybrid category, they took a 25% share of the segment. During this period, all three of the EU’s best-selling plug-in hybrid models were Chinese.
The fast growth has heightened competitive pressure on European car makers and is a new source of friction in trade relations between Brussels and Beijing.
The deal, negotiated over four years, would reduce shipments of Chinese hybrid and plug-in hybrid vehicles to the EU by more than half, Šefčovič said. That would be several million fewer imported cars during that time.
The EU trade commissioner described the deal as an important first step towards easing tensions over auto trade. “But he stressed that the arrangement was not expected to be a long-term solution and would need further negotiations to address remaining issues between the two sides.
Chinese authorities meanwhile called the outcome a way to resolve trade disputes through dialogue. Beijing also stressed the need to safeguard the legitimate export interests of Chinese auto makers, and to ensure stable trade flows of hybrid vehicles between China and Europe.
Although the talks resulted in an agreement, the Chinese side has not issued a formal statement specifying the conditions of the export of hybrid cars within the framework of the deal.
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