Several Chinese automakers have reportedly held talks with regulators in Beijing to secure export quotas for hybrid vehicles destined for the European Union, as companies seek allocations under a proposed China-EU trade arrangement.
Chinese financial news outlet Cailian reported the development on Monday, citing multiple people familiar with the matter. The discussions come less than a month after China and the EU announced an understanding on hybrid vehicle trade.
“The total quota is limited, so each company will not receive a large export allocation. All the automakers are currently working to secure their share,” the report quoted one person familiar with the matter as saying.
The report did not identify the automakers involved or disclose the export volumes they are seeking. It also provided no details about the criteria regulators will use to distribute the allocations or whether any decisions have been made.
Proposed Quota System Could Shape European Strategies
The arrangements under discussion could influence how Chinese automakers plan their European product portfolios. Hybrid vehicles were excluded from the EU’s countervailing duties on China-made battery electric vehicles (BEVs), making them a separate area of trade negotiations between the two sides.
Chinese Commerce Minister Wang Wentao and European Commissioner for Trade and Economic Security Maros Sefcovic held talks in Beijing on October 8-9. Following the discussions, China and the EU announced an understanding on hybrid vehicle trade.
China’s Ministry of Commerce said on October 12 that the sides had agreed on an arrangement allowing growth from the 302,000 hybrid vehicles imported by the EU from China in 2025. The ministry said the framework would provide room for Chinese companies to expand exports while supporting steady growth in trade.
The ministry did not publish specific quota figures or an implementation date. It said China’s allocation would be no lower than that of any other source of EU imports and that the arrangements would comply with World Trade Organization (WTO) rules.
Reported Proposal Sets First-Year Quota at 350,000 Vehicles
Bloomberg reported on October 11, citing a proposal document it had reviewed, that China’s hybrid vehicle export quota to the EU would be set at 350,000 units in the first year. The proposed allocation would increase by 6% annually from the second year, with the measures remaining in place for four years.
The proposal reportedly covered both hybrid electric vehicles (HEVs) and plug-in hybrid electric vehicles (PHEVs). Bloomberg said the arrangements could take effect as early as December 1, although this was a proposed timeline rather than a confirmed implementation date.
The reported mechanism would apply to multiple sources of EU imports to comply with the WTO principle of non-discrimination, while providing exemptions for certain countries and territories.
However, the document did not clarify whether imports exceeding the quotas could still enter the EU subject to additional tariffs or whether the allocations would operate as strict import limits.
EU-China Discussions Follow EV Tariff Dispute
Sefcovic said on October 9 that the understanding involved halving Chinese HEV and PHEV exports to the EU, but did not specify the baseline against which the reduction would be measured.
The discussions form part of broader trade negotiations following the EU’s decision to impose definitive countervailing duties on China-made BEVs in October 2024.
With hybrid vehicles outside the scope of those duties, the emerging quota framework could become an important factor in determining how Chinese manufacturers expand their presence in the European automotive market.