Are the EV tariffs working? Western carmakers shifted production to EU, but Chinese brands continue to grow – analysis

The EU’s electric car tariffs succeeded in reducing the market share of EVs made in China, according to T&E analysis of the trade measures. But while the share of electric cars produced in China by western brands fell, imports from Chinese brands continued to grow. To avoid Europe becoming a dumping ground – or a mere assembly plant – for Chinese EVs, T&E called for further trade measures including tariffs on Chinese batteries.

Western brands move production

Electric cars produced in China accounted for 17% of the EU BEV market in the first quarter of 2026, down from a peak of 22% in 2024 when tariffs were introduced, the analysis finds. The drop was largely driven by Western brands Tesla, BMW and Volvo switching production from China to Europe. European manufacturers' share of Chinese BEV imports fell from 38% in 2024 to 23% in Q1 2026, and Tesla’s dropped from 26% to 19%. Chinese carmakers now account for more than half of Chinese BEV imports.

Chinese carmakers’ response: onshoring and PHEVs

Chinese EV manufacturers were responsive to the tariffs, but different tariff rates led to different results. The BEV imports of SAIC, which has a 35% tariff, almost halved between 2023 and 2025. BYD, which was levied with a 17% tariff, more than doubled its BEV imports into the EU. Despite the tariffs, BEVs by Chinese brands remain 21% cheaper than those from European manufacturers, the analysis finds.

Chinese carmakers are onshoring more EV production to Europe in response to the tariffs. 10 planned production facilities have been announced since the EU Commission president announced an anti-subsidy investigation in September 2023. Chinese manufacturers also shifted production to plug-in hybrid vehicles in response to the tariffs. Chinese brands now have 13% of the EU PHEV market, up from 3% in 2024.

Battery imports surge

Meanwhile, Chinese battery imports – which face virtually no tariffs – increased seven fold between 2020 and 2025. Of the batteries produced in the EU, European manufacturers account for less than a quarter and their future is uncertain. T&E said trade action would help European batterymakers to succeed in the domestic market without slowing the transition to EVs. A 20% tariff on Chinese batteries would increase the price of EU-made BEVs by just 2.8% on average, the analysis projects.

Weaker EU targets, more Chinese imports

The analysis also forecasts the impact on the EV market of revising the EU car CO₂ targets. The weaker targets proposed by the lead lawmaker, Massimiliano Salini MEP, would allow European carmakers to electrify slower and would increase the EV market share of Chinese brands to 30% in 2035, compared to 15% under the European Commission’s proposal.

Lucien Mathieu, Cars Director at T&E, said: “The EU tariffs worked up to a point. Western carmakers moved production to Europe and Chinese manufacturers started to onshore. But European companies’ competitiveness in EV and battery technology is still at stake. The car CO₂ standards are the key to building the market for EVs in Europe, but if the EU wants to build a strong domestic battery supply chain, a combination of incentives and protection will be needed.”

T&E calls on EU lawmakers to:

1. Expand trade defense measures to batteries made in China – increasing the tariff from its current ultra-low level;

2. Prevent circumvention of EU trade defense measures through moving manufacturing to non-EU countries;

3. Adopt the EU Industrial Accelerator Act and Corporate Fleets law without delay to create a strong market for Made-in-EU EVs and batteries;

4. Protect EU car electrification by safeguarding the car CO₂ targets for 2030 and 2035.

ENDS