EU tariffs cut China-built EV share but Chinese brands keep growing, study finds

The European Union's tariffs on Chinese-made electric vehicles have succeeded in reducing the share of China-built EVs sold in Europe, while prompting Western automakers to relocate production to the continent, according to a new analysis published by Transport & Environment on July 12.transportenvironment+1

Tariffs Reshape the Market

The T&E study found that EVs built in China accounted for 17 percent of the EU battery electric vehicle market in the first quarter of 2026, down from a peak of 22 percent in 2024 when the tariffs were first activated. The EU imposed duties of up to 35.3 percent on Chinese-made EVs in late 2024, on top of an existing 10 percent import duty, after an anti-subsidy investigation concluded that Chinese state support was distorting the market.global.niu+3

The tariffs appear to have had their intended effect on Western manufacturers. Companies including Tesla ↗ 1.31% and BMW Bayerische Motoren Werke AG, which had been exporting China-built EVs to Europe, have shifted production toward European facilities. However, the picture is more complicated for Chinese brands themselves.finance.yahoo+1

Chinese Brands Gain Ground Despite Barriers

While volumes of China-built vehicles have stabilized at around 350,000 units, Chinese automakers including BYD and Geely continued to grow their imports despite the tariffs, according to the T&E findings. The analysis noted that the EU's differentiated tariff rates — with BYD facing a lower rate of 17.4 percent compared to SAIC's 37.6 percent — have produced uneven results across Chinese manufacturers.transportenvironment+1

Chinese brands are also moving to neutralize the tariff barrier by building vehicles locally. BYD is set to begin production at its new Hungary plant in the fourth quarter of 2026 and is nearing a decision on acquiring an existing factory in southern Europe — with Spain and France identified as leading candidates — for a second European assembly site. SAIC is planning a factory in Galicia, Spain, with production scheduled to start in 2028.just-auto+3

A Partial Victory for Brussels

The T&E analysis suggests the tariffs represent a partial success for EU trade policy: Western automakers are investing in European production rather than importing from China, but Chinese competitors are adapting by establishing their own European manufacturing footprints rather than retreating from the market. The long-term competitive dynamics of Europe's EV market remain in flux as Chinese automakers push deeper into the continent despite rising trade barriers.thinkchina+1