Chinese car companies are changing how they sell cars in Europe. This is because of new high taxes, called tariffs, that the European Union (EU) is charging on electric cars made in China. These taxes make it more expensive for Chinese companies to sell their battery-electric vehicles, also called BEVs, in Europe.
So, instead of selling only electric cars that run fully on batteries, companies like BYD and Chery are now selling more plugin-hybrids, also called PHEVs. These are cars that have both a battery and a fuel engine. They can be plugged in to charge, but they don’t run only on electricity. By selling these plugin-hybrids, the Chinese carmakers pay a lower import tax when their cars arrive in Europe.
Data shared by a research firm called Rho Motion shows that this plan is working for them. For example, BYD sold 3,269 plugin-hybrids in the EU in March this year. That’s a huge jump compared to last July, when their sales of PHEVs in Europe were almost zero. Chery also sold 757 plugin-hybrids in March. Just like BYD, they had close to no PHEV sales in Europe last summer.
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The EU brought in new taxes in 2024 because it was worried about too many cheap electric cars flooding the European market. These electric cars made in China are often less expensive than those made in Europe. The EU wanted to protect its own car industry and make sure European carmakers could compete fairly.
So, the EU decided to place a tax of up to 45.3% on battery-electric vehicles that are made in China. These new taxes became official in November 2024. The goal was to stop too many Chinese-made BEVs from entering the European market too quickly.
While these taxes hit BEVs hard, the tax on plugin-hybrids stayed much lower. For example, BYD has to pay a 27.5% tax on each BEV it sells in the EU. But it only pays 10% on each plugin-hybrid. This difference gives carmakers a reason to focus more on selling hybrids for now.
In money terms, this is a big difference. Every time BYD sells a BEV called the Atto 3 in Germany, it pays 10,257 euros in taxes. But when it sells a plugin-hybrid called the Seal U PHEV, it only pays 3,999 euros. That’s more than 6,000 euros in savings per car, just by switching to a hybrid model.
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Because of this big cost difference, Chinese car companies are adding more plugin-hybrids to their European offerings. BYD has already announced that it will introduce two more PHEV models in Germany this year. This shows how seriously they are taking this strategy shift.
Other brands like Leapmotor are also adjusting their sales plans. These companies are responding not only to tariffs but also to the slower-than-expected adoption of fully electric cars in Europe. Many people in the EU are still not ready to switch completely to BEVs. This could be because of high prices, lack of charging stations, or concerns about driving range.
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By offering plugin-hybrids, Chinese carmakers can reach more European customers while also keeping costs lower under the new tax rules. Even though full electric cars are the future, these hybrids give buyers an option that feels safer and more familiar, while still being partly electric.
The sales numbers show that this plan is already making a difference. In less than a year, Chinese PHEV sales in Europe have gone from almost nothing to thousands of cars each month. This change is helping Chinese carmakers stay in the game despite the challenges of new taxes.
For now, the strategy of selling more plugin-hybrids seems to be a smart move for Chinese EV companies trying to avoid the heavy costs of European tariffs.
