EU and China agree to halve hybrid car exports over four years

Chinese plug-in hybrid vehicle exports to Europe have grown rapidly—from under 10,000 units monthly two years ago to approximately 200,000 units per month as of 2026—now representing roughly one-quarter of Europe's hybrid vehicle sales. The agreement commits both sides to reduce this to 400,000 vehicles annually while China makes tariff concessions on approximately 40 billion euros in European goods (automotive components, olive oil, footwear), potentially saving European exporters around 1.25 billion euros annually in tariffs. China also commits to continue rare earth and rare earth magnet exports after restrictions imposed in April 2025. Implementation details, including the form and timing of WTO-compliant safeguard measures (potentially tariff quotas by December 2026), remain subject to EU leadership approval on October 15–16, with both sides planning further talks on unresolved issues—including local manufacturing requirements and potential anti-subsidy tariffs on wind turbines—in early 2027.