Chinese automakers, including BYD and Chery, have ramped up sales of plug-in hybrid vehicles (PHEVs) in the European Union as a strategy to bypass the hefty import tariffs on fully electric cars manufactured in China. Data revealed that BYD and Chery sold 3,269 and 757 PHEVs, respectively, in March 2024, a significant increase from almost no sales in July 2024, when provisional tariffs on Chinese-built battery-electric vehicles (BEVs) were first imposed. These tariffs, which can reach up to 45.3%, came into full effect in November 2024, aimed at preventing an influx of cheap Chinese-made electric cars into the European market.
The European Union and China are currently in discussions to relax these tariffs. However, in the interim, Chinese electric vehicle manufacturers are adjusting their European strategies to accommodate the tariffs and the slower-than-anticipated adoption of BEVs in Europe. BYD, for instance, announced plans to introduce two more PHEV models in Germany by the end of the year. While BYD faces a 27.5% tariff on BEVs sold in the EU, it only pays a 10% tariff for PHEVs, making them a more cost-effective option for entering the market. The report highlighted that BYD’s sales of PHEVs increased dramatically, from zero to 3,269 units, while its BEV sales more than doubled to 4,633 units.
Chery, which also faces a 10% tariff on PHEVs and a 21.3% levy on BEVs, has followed a similar strategy. In March 2024, the company sold 310 BEVs and 757 PHEVs. SAIC, another Chinese automaker, faces even higher tariffs on its BEVs, with a 35.3% levy, but has not seen the same increase in PHEV sales.
The shift towards hybrid vehicles is being seen as a workaround to the EU’s tariffs. Didi Bostock, Membership Editor for Rho Motion, remarked that it was only a matter of time before manufacturers found a way to circumvent the market restrictions, which they have now done through hybrid vehicles. This strategy allows them to continue expanding in the European market despite the tariff challenges.
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