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    Drones & Hybrids, China’s trojans to beat EU sanctions

    European Newsdesk Posted on

    Following the EU’s imposition of higher tariffs on Chinese electric vehicles (EVs), manufacturers such as BYD, SAIC, and Geely have pivoted to exporting hybrid vehicles to Europe, seeking to strengthen their presence in the market by circumventing these tariffs. Not just this, the banned drone company DJI is working with auto manufacturers to have a built in drone in certain models, James Bond style.

    Chinese EV makers appear to have found a way to sidestep the EU’s increased duties, continuing to grow their European market share. Companies like BYD, Geely, and state-owned SAIC have significantly increased their hybrid exports, as hybrids, which combine electric batteries with internal combustion engines, are not currently subject to the higher tariffs.

    Other Chinese manufacturers have adopted additional strategies, such as establishing assembly and production facilities within Europe, to minimize costs and tariff impacts.

    Chinese hybrids are proving to be formidable competitors for both Japanese and European brands. This has led to declining sales for Japanese automakers like Toyota, Honda, and Nissan and affected European giants such as Volkswagen. Between July and October of this year, China exported 65,800 hybrid vehicles to Europe—more than triple the volume exported during the same period last year, according to the China Passenger Car Association (CPCA).

    The EU’s increased tariffs on Chinese EVs follow allegations of state subsidies enabling these manufacturers to sell at steep discounts, negatively impacting domestic European automakers. Tariffs include 17% for BYD, 35.3% for SAIC, and 18.8% for Geely.

    While shifting focus to hybrid exports may be an effective short-term strategy for Chinese manufacturers, it could provoke the EU to impose similar tariffs on hybrids, particularly if their impact on European producers becomes too pronounced.

    Why Are Chinese Hybrid Vehicles Gaining Popularity in Europe?

    The rising popularity of Chinese hybrids in Europe is largely due to their affordability compared to European hybrids and EVs. This cost advantage has become critical in the wake of the pandemic, the ongoing cost-of-living crisis, and higher interest rates across Europe.

    In addition to competitive pricing, Chinese hybrids offer modern, sleek designs, advanced technology, and an expanded range of features, making them attractive to European consumers. Their improved reliability, safety ratings, and overall quality have further bolstered their appeal.

    Hybrids also serve as a transitional option for consumers considering a switch to EVs, offering the familiarity and convenience of a traditional engine while being more affordable than full EVs. In many cases, they also qualify for tax incentives.

    Chinese automakers have introduced a variety of hybrid models tailored to the European market. BYD’s hybrid lineup includes the SEAL U DM-i, its first European hybrid, and the Song Plus DM-i. Geely offers plug-in hybrids such as the Galaxy Starship 7 and mild hybrids like the Azkarra, which feature small electric motors to complement traditional engines. SAIC’s portfolio includes the MG6 PHEV, Roewe Erx5 Super Hybrid Edition SUV, MG3 HEV, and MG EHS Plug-in Hybrid.

    These factors position Chinese hybrids as a growing force in the European automotive market, poised to reshape competition and consumer preferences in the coming years.

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