EU to introduce minimum pricing for Chinese BEV imports

Following ongoing negotiations between the EU and China, the EU is preparing to introduce minimum pricing mechanisms for Chinese-made BEVs imported into the bloc. This move follows the EU’s final ruling on tariffs in October 2024.

What are the tariffs?

Since 2024, Chinese OEMs have been subject to countervailing duties ranging from 7.8% to 35.3%, on top of the standard 10% baseline tariff. These measures were introduced after an anti-subsidy investigation concluded that Chinese manufacturers had benefited from unfair state support.

What are the changes?

On 12 January, the EU issued guidance to Chinese automakers outlining a replacement mechanism for the existing tariffs, designed to continue protecting European manufacturers from unfair competition.

Under the proposed system, Chinese OEMs can avoid tariffs provided they commit to not selling their BEVs in the EU below an agreed minimum price.

Applications must be submitted to the European Commission for approval, with importers able to choose between applying for a minimum import price (MIP) or remaining under the existing countervailing duties regime. MIPs will be established on a per-model basis, including all model variants, and will be benchmarked against comparable EU-produced BEV sales prices. Failure to comply may result in the retroactive collection of duties at current tariff levels.

Notably commitments to invest in EU manufacturing may support approval, with OEMs that have firm plans for EU production potentially benefiting from a more favourable assessment.

The guidance also highlights that OEMs with significant sales of non-covered products, such as hybrids and ICE vehicles (for example BYD), present a higher risk of cross-compensation. The risk for the EU is OEMs could compensate minimum import prices by discounting other vehicle types sold to EU importers. It has been explicit that importers in this position pose a higher risk of cross-compensation and therefore will be less likely to receive approval. This could complicate purchasing for large fleet buyers with mixed powertrain orders, who may typically expect volume discount, something that is common practice at present.

By contrast, BEV-only manufacturers will be considered to pose a significantly lower risk of cross-compensation.

How have China’s EV sales changed over the course of tariffs?

Despite the first iterations of tariffs being introduced on BEVs in July 2024, BEV sales of Chinese made EVs in Europe remained steady in 2025, marking a 2% drop on in the 11 months of 2025 compared to the same period in 2024. This relative steadiness conceals a marked increase in BYD’s BEV imports, countering a decrease in imports for Tesla. However, the PHEV market tells a different story, with PHEV imports from China increasing over 300% in the first 11 months of 2025 as OEMs switched strategies to incorporate tariff free PHEVs.