China, EU keep EV trade talks alive after hybrid vehicle understanding

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China-EU EV trade talks

Highlights

China and the EU reached a WTO-compliant understanding on hybrid vehicle trade amid ongoing negotiations, with further details undisclosed.
The two sides will continue talks on price undertakings and anti-subsidy review procedures for Chinese EVs, and plan a third consultation meeting in March 2027.
Imports of plug-in hybrids from China to the EU rose 86% with prices down 20% in the year to September, with China increasing its 2025 import value share to 30%.

Beijing talks set out next steps

As reported by Reuters, citing the Chinese commerce ministry, the two sides reach an understanding on trade in hybrid vehicles in a WTO-compliant manner after intensive negotiations, although the statement does not provide details.

European Trade Commissioner Maros Sefcovic says he is seeking tangible results from his visit to China, while the European Commission says he will comment on the talks at a press conference. The Chinese ministry describes the discussions between Commerce Minister Wang Wentao and Sefcovic on Thursday and Friday as pragmatic and productive.

China and the EU also agree to continue discussions on price undertakings and review procedures linked to the EU's anti-subsidy investigation into Chinese electric vehicles. Both sides will keep exploring the possibility of lowering tariffs on certain goods within WTO rules and continue dialogue on market access for medical devices.

The ministry says a third regular meeting of their consultation mechanism will take place in March 2027, and the two sides agree to maintain communication, including a ministerial-level video conference in January.

Auto imports remain central to wider dispute

EU officials remain concerned about a sharp rise in car imports from China as trade tensions continue to weigh on bilateral ties. Imports of plug-in hybrids into the EU rise 86% in the year to September, with prices down 20%, and more than half of those vehicles now come from China.

For 2025, China's share of PHEV imports stands at 30% in value terms. The broader dispute over low-cost Chinese EV exports dates to 2024 and has expanded to sectors including brandy, pork, dairy, rare earths and critical minerals.

China is seeking overseas demand for a large volume of lower-priced, state-subsidized goods that domestic consumers cannot fully absorb, while the EU is balancing cheaper imports that can ease living costs against efforts to protect and rebuild its own manufacturing base.

Our earlier coverage of Tesla’s China-made EV sales described how deliveries from its Shanghai plant kept rising year on year, supported by exports and a recovery in European demand. It also noted that heavy discounting in China’s intensely competitive market was helping defend share, even as Tesla’s global delivery growth remained under pressure.

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