BYD and MG sidestep EU tariffs with plug-in hybrids
As a result of an anti-subsidy investigation into Chinese EV makers, the EU imposed additional tariffs last year, on top of the standard 10 per cent duty applied to all cars imported from China. Since then, the two most active Chinese brands in Europe, BYD and MG, have exploited a loophole to boost sales.
According to Dataforce figures, both manufacturers have increasingly turned to hybrids since the announcement of the extra tariffs, which stand at 17.0 per cent for BYD and 35.3 per cent for MG, in addition to the standard 10 per cent.
BYD registered around 20,000 plug-in hybrids in the EU in the first half of 2025 – a rise of 17,000 per cent. The company only began registering plug-in hybrids in the EU in the second quarter of 2024, starting with the Seal U DM-i, its sole PHEV to date. Previously, BYD’s European line-up was fully electric. More PHEVs are on the way: according to Handelsblatt, the BYD Seal 6 estate will soon follow. At the same time, BYD is pushing ahead with plans to localise EV production in Europe. To that end, it is already building plants in Hungary and Turkey, which would exempt the company from both standard and special tariffs.
MG has also increased hybrid registrations in the EU during the first half of 2025, while BEV registrations dropped by 60 per cent. Demand rose for the plug-in hybrid MG HS and the full hybrids MG ZS and MG 3. The shift away from EVs is even more pronounced at MG than at BYD, partly due to its broader non-EV portfolio and partly because MG’s parent SAIC faces the highest surcharge – 35.3 per cent on top of the regular duty.
New competition for plug-in hybrids
Experts such as Beatrix Keim, Director of the Centre for Automotive Research in Duisburg, keep warning European manufacturers about the trend towards plug-in hybrids from Chinese manufacturers. According to the German Handelsblatt, the MG HS starts at around €28,000 as a plug-in hybrid, while the comparable VW Tiguan plug-in hybrid costs around €40,000. However, this is not correct – the €28,000 is the price for a pure combustion engine version of the MG HS, which is also available and is not subject to special tariffs. The MG HS, on the other hand, starts at just under €40,000 as a plug-in hybrid.
Nevertheless, European manufacturers are facing new competition in the PHEV market, which was only triggered by the special tariffs on electric cars. Car expert Beatrix Keim says that she sees Europe “at the beginning of a plug-in price war.” The competition from Asia is thus moving closer to two goals. “Chinese manufacturers are lowering prices, thereby increasing brand awareness and market share, and later they can redirect customers to electric cars if necessary.”
It is not only Chinese manufacturers that are affected by the EU’s special tariffs on EVs. European brands are also hit if their vehicles are made in China. The Cupra Tavascan, for example, is subject to a 20.7 per cent surcharge – a total duty of 30.7 per cent. BMW is likewise affected, as the all-electric Mini Aceman and Cooper SE are built in China at Spotlight Automotive, a joint venture with Great Wall Motors. Both Minis are also subject to 30.7 per cent tariffs.
Weak results and lawsuits against the EU
Seat/Cupra has cited the tariffs as a key reason for its weak half-year results. BMW, along with other manufacturers, has already filed a lawsuit against the EU, claiming serious procedural and assessment errors in how the duties were determined.
Other brands hit by the EU tariffs include premium EV makers Nio, Polestar and Xpeng, as well as Smart, now operated under a Geely–Mercedes joint venture. These companies, however, only offer fully electric models and cannot benefit from the plug-in loophole.
handelsblatt.com, automobilwoche.de (both in German)
This article was first published by Florian Treiß for electrive’s German edition.
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