Chinese EV makers sell more plug-in hybrids in the EU to avoid tariffs

Chinese carmakers including BYD and Chery are selling more plug-in hybrids (PHEVs) in the EU to avoid import tariffs on Chinese-made electric vehicles (EVs), data released on Friday showed.

The two brands sold 3,269 and 757 PHEVs respectively in the bloc in March, up from near zero sales in July 2024 when provisional tariffs were first introduced, research firm Rho Motion said in a report.

EU tariffs of up to 45.3% on Chinese-built battery-electric vehicles (BEVs) came into full effect in November to prevent a flood of cheap cars.

Facing disruption from US tariffs, the EU and China are negotiating a relaxation of the European levies.

But in the meantime, EV makers such as BYD and Leapmotor have adjusted their European strategy to adapt to the EU tariffs and the slower than expected mass adoption of BEVs in Europe.

On Tuesday BYD said it would introduce two more PHEV models in Germany this year.

BYD pays a 27% tariff on BEVs it sells in the EU and 10% for PHEVs. That means paying €10,257 (R214,475) for each Atto 3 BEV it sells in Germany, the report said. For the Seal U PHEV, it pays €3,999 (R83,643).

The group's March BEV sales in the EU more than doubled to 4,633 from March 2024, but its PHEV sales went from none to 3,269.

Chery, which also pays a baseline 10% tariff and an additional 21.3% levy on BEVs, sold 310 BEVs and 757 PHEVs.

SAIC faces the highest BEV tariff of 35.3% but it has not scaled up PHEV sales as much, the report said.

“It was only a matter of time before manufacturers found a backdoor to the market,” said Didi Bostock, membership editor for Rho Motion. “And now they have, through hybrids.”