Chinese electric vehicle manufacturers are stepping-up their investment in plug-in hybrid electric vehicles (PHEVs) to sidestep EU tariffs on Chinese battery electric vehicle (BEV) imports, Rho Motion has said.
Following a lengthy investigation into China government subsidies, the EU imposed tariffs ranging from 7.8% to 35.3% on Chinese BEV imports in October 2024, with these tariffs set to be in place until at least 2029.
This has prompted manufacturers, such as BYD, SAIC, and Chery, to recalibrate their approach.
‘Chinese OEMs are seeking to realign their sales strategy in Europe to best reflect the regulatory landscape of the region,’ Rho Motion noted.
Expanded portfolios
Prior to the introduction of the tariffs, SAIC was the only significant Chinese seller of PHEVs in Europe, however other OEMs are expanding their portfolios to take advantage of this ‘gap’ in EU policy.
‘Although Chinese EV OEMs have strong margins on vehicles they make, the tariffs have eroded this,’ Rho Motion noted. ‘It was only a matter of time before Chinese OEMs looked to change their sales strategy to improve their margins in the EU.’
As an example, Rho Motion noted that in Germany, BYD’s Atto 3 BEV, retailing at €37,990, incurs a 27% total tariff duty, or €10,257). However, the same company’s Seal U PHEV, priced at €39,990, pays a 10% duty, or €3,999.
Market shift
This has led to a shift in sales of Chinese PHEVs in the market – in March 2025, more than two fifths (41%) of BYD’s EU EV sales were PHEVs, while close to half (49%) of SAIC’s EV sales were PHEVs. In the case of Chery, PHEVs accounted for 71% of its total EV volume.
‘As sales continue to evolve throughout this year, the extent to which Chinese OEMs have changed their sales strategy will become clear,’ Rho Motion commented. ‘For now, the lack of tariffs on PHEVs is an opportunity multiple Chinese OEMs are taking advantage of.’ Read more here.
