Talks between China and the European Union (EU) over tariffs on Chinese electric vehicles have wrapped up. The EU last year imposed high tariffs over concerns about the low-price push of Chinese EVs, and China hit back with retaliatory tariffs on some European goods. The two sides have now agreed to set a price floor for Chinese-made cars exported to the EU instead of imposing tariffs. As a result, some forecast that Chinese EV exports to Europe will grow an average of 20% a year over the next two years.
On the 13th, according to China's official Xinhua News Agency, China's Ministry of Commerce said on its website the previous day that the EU will issue general guidelines on "price undertakings" for Chinese EV exporters. Under the plan, Chinese EV makers must submit a price undertaking application when exporting to the EU, setting a floor below which they will not sell. If the EU approves it, Chinese brands can avoid high tariffs.
The ministry said, "The EU will soon issue a 'guidance document on submitting price undertaking applications,' in which the EU will adhere to the principle of non-discrimination, apply the same legal standards to all applications in accordance with World Trade Organization (WTO) rules, and conduct objective and fair evaluations." The ministry added, "This agreement fully reflects the spirit of dialogue and the outcomes of consultations between China and the EU. Within the framework of WTO rules, China and the EU have the ability and the will to properly resolve differences through dialogue and consultation and to maintain the stability of the China-EU and global automotive industry supply chains."
Xinhua, citing an official at the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME), reported, "With this agreement, Chinese EV companies will be able to avoid EU tariffs if they apply for price undertakings in accordance with the guidance document and meet the conditions." The official assessed the move as achieving a "soft landing" for the EU's tariff issue on Chinese EVs.
Trade friction between China and the EU escalated after the EU in Oct. 2024 sharply raised tariffs on Chinese EVs from 10% to 17.8%–45.3%. In retaliation, China launched anti-dumping and anti-subsidy probes and imposed tariffs on European dairy and agricultural and livestock products, brandy, and plastic feedstocks. Since around Apr. last year, the two sides have continued negotiations centered on applying price undertakings instead of high tariffs.
This progress in negotiations is bolstering the outlook for Chinese EVs to expand in the European market. According to a report by China Business News citing market research firm Dataforce, as of Nov. 2025, Chinese brands' share of the European EV market reached a record high of 12.8%. In the fast-growing hybrid vehicle market, Chinese brands' share exceeds 13%, and sales of Chinese-made brands are expanding not only in EU member states but also in countries of the European Free Trade Association (EFTA) and the U.K.
According to the China Passenger Car Association, from January to November last year, China exported 1 million finished vehicles to the EU. The EU ranked No. 1 across all three export segments: battery electric, plug-in hybrid, and conventional hybrid. Chinese automakers such as SAIC Motor (SAIC), BYD, Chery Automobile Co. (奇瑞), Leapmotor (领跑), and Xpeng (Xpeng) are steadily increasing their push into the European market.
Cui Dongshu, secretary-general of the China Passenger Car Association, said the price undertaking system could initially lead to a short-term drop in sales due to some corporations' price and product structure adjustments. But he projected, "As corporations adapt to the new rules, local production capacity expands, and product competitiveness improves, sales of Chinese EVs in the EU market will gradually recover." He also said, "From 2026 to 2028, Chinese EV exports to the EU will maintain an average annual growth rate of about 20%," adding that the latest China-EU tariff talks will become an important driving force for the expansion of Chinese EVs into Europe and the growth of the global EV market.
Cui said, "In the long term, China-EU relations will shift from trade-level sparring to in-depth industrial cooperation," forecasting, "The two sides will also strengthen cooperation in areas such as battery recycling and carbon emissions management, jointly driving growth in the EU EV market."