The European Union has asked China to voluntarily limit exports of Chinese-made hybrid vehicles to the bloc, the Financial Times (FT) reported, citing unnamed sources.
Brussels wants China to agree to keep its share of hybrid vehicle sales in the bloc at about 15%, compared with more than a third currently.
According to the report, the move comes ahead of trade talks in Beijing next month and is part of a broader effort to avoid a trade war before the meeting.
The request follows growing pressure on European carmakers, with several companies announcing major job cuts as lower-cost Chinese-made vehicles have expanded their presence in the market.
Volkswagen Group’s supervisory board approved its Future Plan 2030 earlier this month, including a further group-wide reduction of roughly 50,000 positions.
That followed an earlier announcement of 50,000 job cuts this year, taking the carmaker’s total planned reductions by the end of the decade to 100,000.
It also comes after the EU set a deadline in June for China to deliver “tangible results” by October on narrowing the bloc's trade deficit.
One source said Brussels had also asked China to show restraint in exports of other goods, including chemicals, and to increase purchases of European products.
“If they will not limit their exports to our market then we will. This is about stopping deindustrialisation. We have to act. It's about managed trade,” an EU official told the FT.
European Commission President Ursula von der Leyen said the bloc’s trade deficit with China, running at €1bn ($1.14bn) a day, had “reached a tipping point”, referring to a “second China shock” in her State of the Union address.
The EU and China established the EU-China Trade and Investment Consultations forum in June to address market access concerns.
Brussels imposed anti-subsidy tariffs of up to 45% on Chinese electric vehicles in October 2024, prompting retaliatory Chinese tariffs on EU cognac, meat and dairy exports.
Imports of Chinese battery electric vehicles increased only modestly after that.
Hybrid vehicle imports, which face a flat 10% EU tariff, rose more than tenfold, from 3,800 units in October 2024 to 50,000 in July 2026, while average prices fell.
