- China’s major exporters publicly backed the China‑EU hybrid trade framework, signaling a strategic pivot to manage export volumes amid rising political scrutiny and avoid wider trade escalation.
- September exports: China shipped 917,000 passenger vehicles, 558,000 NEVs; BYD 175,877, Chery 85,990, Geely 72,893, and EU agreed a quota based on a 2025 baseline of 302,000 vehicles.
- Targeting EU hybrid market share pressures legacy brands but risks include a halved export quota projection, reduced export tax rebates from 13% to 9% effective April 1, 2027, and scaling/localization execution.
On October 14, BYD, Geely Holding and Chery Automobile issued separate statements supporting the positive outcomes of China-EU consultations on hybrid vehicle trade and expressing hope that the consensus would be implemented.
The statements came after China and the EU recently reached a framework understanding on hybrid vehicle trade, seeking to prevent their automotive trade differences from escalating further.
According to China’s Ministry of Commerce on October 12, the second meeting of the China-EU Trade and Investment Dialogue Mechanism reached a framework understanding on hybrid vehicle trade.
This dialogue confirmed three fundamental principles: respect for facts, non-discrimination and compliance.
Maroš Šefčovič, the European Commission’s commissioner for trade and economic security said that the consensus involved cutting the number of hybrid vehicles exported from China to the EU by half.
Notably, the figure was based on the EU’s projections of Chinese hybrid vehicle exports to the bloc over the next four years under a hypothetical no-agreement scenario.
A spokesperson for China’s Ministry of Commerce responded that the two sides had agreed to an upward adjustment based on the 2025 baseline of 302,000 vehicles.
The spokesperson added that China’s allocated quota would be no lower than that granted to any other import source by the EU.
All three automakers stressed the importance of a stable trade environment.
BYD said the consultations would help manage trade differences and prevent tensions from escalating, providing a more stable and predictable environment for China-EU hybrid vehicle trade.
Geely Holding said it supported the three fundamental principles agreed upon by both sides and would continue working with European industry partners.
Chery emphasized the strong complementarity between China’s and Europe’s automotive industries.
The automaker added that it would continue to deepen its presence in the European market and integrate into local industrial development.
The China Association of Automobile Manufacturers (CAAM) also issued a statement on the same day welcoming the outcome of the consultations.
It called for resolving differences through dialogue and maintaining the smooth operation of industrial and supply chains.
New energy vehicle exports have become a key driver of China’s vehicle exports.
According to data from CPCA, China exported 917,000 passenger vehicles, including complete vehicles and completely knocked-down (CKD) kits, in September 2026, up 73.7% year on year.
Of that total, exports of new energy passenger vehicles reached 558,000 units, up 163.5% year on year and accounting for 60.8% of total exports for the month.
BYD, Chery and Geely ranked as the three largest exporters for the month, shipping 175,877, 85,990 and 72,893 vehicles, respectively.
As exports grow, the policy environment is also changing. On October 12, China’s Ministry of Finance and State Taxation Administration issued an announcement.
This stipulates that the export tax rebate rate for new energy vehicles would be reduced from 13% to 9% effective April 1, 2027.
The change means Chinese automakers will gradually have to compete with less support from export tax rebates.
They will need to absorb the additional cost pressure through cost reductions, pricing adjustments and greater localization of overseas production.
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