Chinese Carmakers Adapt to EU Tariffs

European Union tariffs have reduced the share of electric vehicles manufactured in China sold in the bloc from 22% in 2024 to 17% in the first quarter of 2026, according to a new analysis by the environmental transport group Transport & Environment (T&E).

The report found that much of the decline was driven by Western automakers, including Tesla, BMW and Volvo, shifting production from China to Europe. At the same time, Chinese manufacturers have continued to expand their presence and now account for more than half of all electric vehicles imported from China.

According to T&E, Chinese automakers are adapting to the tariffs by investing in new manufacturing plants across Europe and expanding sales of plug-in hybrid vehicles. Their share of the EU plug-in hybrid market has risen from 3% to 13%, while their electric vehicles remain, on average, 21% cheaper than comparable European models.

The report also highlights a sharp increase in imports of Chinese-made batteries, which face few trade barriers. T&E estimates battery imports have increased sevenfold and argues that the EU should introduce a 20% tariff on imported batteries. The organization says such a measure would raise the price of European-made vehicles by less than 3% while helping protect the bloc's battery industry.

Without additional measures, T&E projects that Chinese brands could account for around 30% of the EU automotive market by 2035.

(max)