Are EU EV Tariffs Working?
A new analysis by Transport & Environment (T&E) reveals mixed results on the effectiveness of EU electric car tariffs on Chinese imports. While the tariffs succeeded in reducing the market share of EVs made in China, particularly among Western brands, Chinese manufacturers continue to expand their presence in the European market. The report highlights significant shifts in production, surging battery imports, and the need for further trade measures.
Western Carmakers Shift Production to Europe
Electric cars produced in China accounted for 17% of the EU battery electric vehicle (BEV) market in the first quarter of 2026, down from a peak of 22% in 2024 when tariffs were introduced. This drop was largely driven by Western brands—Tesla, BMW, and Volvo—moving production from China to Europe. European manufacturers’ share of Chinese BEV imports fell from 38% in 2024 to 23% in Q1 2026, while Tesla’s share dropped from 26% to 19%. As a result, Chinese carmakers now account for more than half of all Chinese BEV imports into the EU.
Differential Impact on Chinese Carmakers
Chinese EV manufacturers responded to the tariffs, but different tariff rates led to different outcomes. SAIC, facing a 35% tariff, saw its BEV imports almost halve between 2023 and 2025. In contrast, BYD, levied with a 17% tariff, more than doubled its BEV imports into the EU. Despite the tariffs, BEVs from Chinese brands remain 21% cheaper than those from European manufacturers, according to the analysis.
Chinese Car Makers Onshore and Shift to PHEVs
In response to the tariffs, Chinese carmakers are moving more EV production to Europe. Since the EU Commission president announced an anti-subsidy investigation in September 2023, 10 planned production facilities have been announced. Additionally, Chinese manufacturers have shifted production toward plug-in hybrid vehicles (PHEVs). Chinese brands now hold 13% of the EU PHEV market, up from 3% in 2024.
Battery Imports Surge Amid Low Tariffs
Chinese battery imports—which face virtually no tariffs—increased sevenfold between 2020 and 2025. Of the batteries produced in the EU, European manufacturers account for less than one quarter, and their future is uncertain. T&E said trade action would help European battery makers succeed in the domestic market without slowing the transition to EVs. The analysis projects that a 20% tariff on Chinese batteries would increase the price of EU-made BEVs by just 2.8% on average.
Weaker EU Targets Could Boost Chinese Imports
The analysis also forecasts the impact of revising EU car CO2 targets. Weaker targets proposed by the lead lawmaker, Massimiliano Salini MEP, would allow European carmakers to electrify more slowly and would increase the EV market share of Chinese brands to 30% in 2035, compared to 15% under the European Commission’s proposal.
T&E Calls for Further Trade Measures
Lucien Mathieu, Cars Director at T&E, said: “The EU tariffs worked up to a point. Western carmakers moved production to Europe and Chinese manufacturers started to onshore. But European companies’ competitiveness in EV and battery technology is still at stake. The car CO2 standards are the key to building the market for EVs in Europe, but if the EU wants to build a strong domestic battery supply chain, a combination of incentives and protection will be needed.”
T&E calls on EU lawmakers to:
- Expand trade defense measures to batteries made in China, increasing the tariff from its current ultra-low level;
- Prevent circumvention of EU trade defense measures through moving manufacturing to non-EU countries;
- Adopt the EU Industrial Accelerator Act and Corporate Fleets law without delay to create a strong market for Made-in-EU EVs and batteries;
- Protect EU car electrification by safeguarding the car CO2 targets for 2030 and 2035.