EU Trade Chief Says China Agreed to Moderate Hybrid Car Exports, Possibly Cutting Them by More Than Half

Since the first EU-China Trade and Investment Consultations on June 29, Brussels has pressed Beijing to shrink a trade deficit that cost the bloc more than €1 billion a day last year, according to EU data. On Friday, Oct. 9, the European Commission's trade chief said he had a first result.

Maroš Šefčovič, speaking in Beijing after two days of talks with Commerce Minister Wang Wentao, announced a "shared understanding to moderate China's export of hybrids and plug-in hybrids to the European Union." He said it "opens up the prospect of cutting China's exports by more than half" and would reduce imports of several million cars over four years.

He did not say how the deal would work.

What was agreed, and what was not

Šefčovič described the package as the end of a "first phase" of negotiations. He called it "a first step" and said the two sides will reconvene by January.

The EU-side commitments on hybrids carry no published volume caps, quotas or enforcement tools. Šefčovič said the mechanism still needs political endorsement from EU leaders, who meet in Brussels next Thursday, Oct. 15.

The other outcomes he listed:

• Rare earths and magnets. China will keep processing export licenses for rare earths and permanent magnets through a "green channel" fast-track mechanism, according to China's Commerce Ministry. Šefčovič said the aim is to make it "smoother, more user-friendly" for European firms. No timeline for shipments was given.
• Market access. China will lower most-favoured-nation tariffs on EU goods including car parts, olive oil and footwear. Šefčovič put the affected exports at almost €4 billion and the duty savings at at least €225 million.
• EV anti-subsidy case. The two sides will keep talking about price undertakings and review procedures in the EU's anti-subsidy investigation into Chinese electric vehicles, according to a joint statement.
• Foreign subsidies and inverters. On the EU's foreign subsidies regulation, the two sides agreed only to hold technical discussions. On inverters, the EU clarified that its guidance on clean-energy funding is country-neutral. It did not withdraw the rules.

China's Commerce Ministry released its own list of 16 "consensus outcomes." An analysis by the trade newsletter Geopolitechs notes that the joint statement refers only to an "understanding on trade in hybrid vehicles." The "halve" language comes from Šefčovič's own remarks and his post on X. Beijing has not publicly put a number on the cut.

Why hybrids

The target is grounded in recent import data. Plug-in hybrid imports into the EU rose 86% in the year to September, while prices fell 20%, according to figures cited at the briefing. More than half of those vehicles now come from China. In 2025 China's share was 30% in value terms.

The surge landed after Brussels put duties on Chinese battery-electric vehicles, a dispute dating to 2024. Chinese shipments to the EU totalled $560 billion last year, up from $517 billion in 2024, according to UN Comtrade data.

Šefčovič said the deal marks a change in how Beijing has behaved. "For the first time China has accepted to moderate its export without going through the phase of prior trade tension," he said.

Beijing's position

China's Commerce Ministry said Wang told Šefčovič that China is not "the root cause" of the EU's problems but a partner in solving them.

That framing sits against the EU's complaints. Commentator Milton Ezrati wrote in the Epoch Times that Chinese exports to the EU rose more than 10% between the last quarter of 2024 and the second quarter of 2026. He tied the shift to U.S. tariffs that cut Chinese sales to America by about half between January 2025 and January 2026. European officials point to Beijing's industrial subsidies and an undervalued yuan.

A French government report earlier this year called the pressure on European industry "The Chinese Steamroller." ECB President Christine Lagarde has said China now competes directly with about 40% of the areas where EU members claim an advantage, up from 25% in the early 2000s.

Industry reaction and the pressure behind the deal

The European carmakers' association ACEA welcomed the interim deal. "Today's announcement can help facilitate the transition to a new era of Chinese presence in the European market in an orderly way," said Director-General Sigrid de Vries. ACEA has also warned that a sudden surge of Chinese hybrids would be "highly disruptive to the European economy as a whole."

France and Germany have previously urged Brussels to build a "last-resort" trade instrument. The EU has floated retaliatory measures if talks fall short, and European leaders are expected to weigh whether this package justifies more negotiation or tougher defensive steps.

The rare earth piece carries its own history. The EU accused China of "weaponising" its dominance of rare earths after Beijing restricted exports in 2025 during its trade war with the U.S. The deal keeps licensing under Beijing's control, with a smoother process promised.

Neither side has committed to a comprehensive fix for Chinese industrial overcapacity or the broader deficit.

Next steps

EU leaders take up the package in Brussels on Oct. 15. If they endorse it, it is not yet clear how a reduction of several million cars over four years would be measured and enforced. Šefčovič did not say. The two sides plan a video conference in January and a full meeting in March, according to the Chinese readout.