Volkswagen seeks tariff protection as Chinese brands capture 28% of the PHEV market in Europe.

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

      Oliver Blume stated that the EU should impose greater tariffs on Chinese plug-in hybrids after the Tiguan PHEV dropped from being the best-selling plug-in hybrid in Europe to fourth place in just one year. The segment is now led by the BYD Seal U, followed by the BYD Atto 2 and Jaecoo 7, all of which are Chinese models. “We have no time to lose,” remarked Blume during the company’s earnings call for the first half of the year.

      According to Dataforce, Chinese brands captured 28.3% of Europe’s PHEV market in the first half of 2026. The EU has already set tariffs as high as 35% on top of the standard 10% duty for Chinese battery-electric vehicles; however, these do not apply to plug-in hybrids. Anticipating this, Chinese automakers shifted their focus to PHEVs to circumvent the tariffs. Chinese car sales in the UK jumped to 285,000 last year, partly due to Britain's lack of additional tariffs on plug-in hybrids.

      Blume argues that while the tariffs on battery-electric vehicles (BEVs) are effective, the coverage gap concerning PHEVs undermines the overall policy. “The regulations on BEVs are working. There, we are competitive in terms of pricing. Where it’s not working is with the plug-in hybrids,” he commented. Handelsblatt has reported that the EU is contemplating further tariffs on Chinese PHEVs, though the specifics regarding timing and rates remain uncertain. European automakers depend heavily on PHEVs to comply with stricter emissions regulations, and losing ground to cheaper Chinese competitors jeopardizes both their compliance strategies and their revenue.

      VW's position is not strong; Blume has suggested job cuts that may total up to 100,000 employees, which is double the previously approved 50,000. Geely has halted new factory construction and instead uses Volvo and Ford plants in Europe to manufacture without incurring additional import duties. Chinese brands have doubled their sales in Europe within a year, reaching nearly 686,000 units and claiming 9.5% of the overall market. Tariffs may provide a temporary reprieve, but whether VW can utilize that time to produce competitively priced PHEVs remains an unanswered question.