Volkswagen is seeking tariff protection following the capture of 28% of Europe's PHEV market by Chinese brands.

      TL;DRVW’s Tiguan PHEV has fallen from the top spot to fourth place in Europe, as it was surpassed by the BYD Seal U, BYD Atto 2, and Jaecoo 7. Volkswagen CEO Oliver Blume is calling for the European Union to implement higher tariffs on Chinese plug-in hybrids. Currently, Chinese brands account for 28.3% of the PHEV market in Europe.

      Blume made his remarks during the company's earnings call for the first half of the year, after the Tiguan PHEV slid from being Europe’s best-selling plug-in hybrid to fourth place within a year. The BYD Seal U now tops the market, with the BYD Atto 2 and Jaecoo 7 in second and third place, all of which are from China. “We cannot afford to delay,” stated Blume.

      According to Dataforce, Chinese manufacturers captured 28.3% of Europe's PHEV market in the first half of 2026. The EU has already imposed tariffs as high as 35% on Chinese battery-electric vehicles, in addition to the standard 10% tariff, but these do not cover plug-in hybrids. In response, Chinese automakers have shifted their focus to PHEVs to evade these tariffs. Additionally, sales of Chinese cars in the UK soared to 285,000 last year, partly due to the absence of extra tariffs on plug-in hybrids.

      Blume argues that the BEV tariffs are effective, but the lack of similar tariffs on PHEVs undermines their impact. “The regulations on BEVs are functioning well. We are competitive regarding pricing there. The issue arises with plug-in hybrids,” he commented. Handelsblatt has reported that the EU is contemplating further tariffs on Chinese PHEVs, although the specifics regarding timing and rates are still uncertain. European automakers rely heavily on PHEVs to satisfy stricter emissions regulations, and losing ground to cheaper Chinese manufacturers poses a threat to both their compliance efforts and revenue.

      VW is not in a position of strength, as Blume has suggested potential job cuts that could affect up to 100,000 employees, which is double the 50,000 already sanctioned. Geely has halted the construction of new factories and is utilizing Volvo and Ford facilities to manufacture in Europe without incurring import duties. Chinese brands have achieved a remarkable increase in European sales, nearly doubling to around 686,000 deliveries, claiming 9.5% of the overall market. While tariffs may buy time, the crucial question remains whether VW will utilize that time to develop competitive PHEVs on price.