Volkswagen CEO Calls on EU to Impose Tariffs on Chinese PHEVs

Oliver Blum, CEO of Volkswagen Group, publicly urged the European Union during the company's 2026 mid-year earnings call on July 24 to swiftly impose high tariffs on plug-in hybrid electric vehicles (PHEVs) imported from China. The move aims to counter the rapid expansion of Chinese brands in Europe's PHEV market — where Chinese-made PHEVs sold 208,368 units in the first half of 2026, capturing a 27.3% market share.

According to market analytics firm Dataforce, the three best-selling PHEV models in Europe today are all Chinese: BYD Seal U ranks first, BYD Atto 2 second, and Jetour 7 third. Last year's segment leader — the Volkswagen Tiguan — has slipped to fourth place.

Blum stressed: "We no longer have time to waste." He noted that Volkswagen Group has just lowered its 2026 revenue forecast, citing rising U.S. tariff costs and intensifying competitive pressure from Chinese automakers. He urged European policymakers to reach consensus on protective measures within the coming months, stating, "This would restore a level playing field in the European automotive market."

Blum proposed that the new tariff structure targeting Chinese PHEVs mirror the current duties applied to Chinese battery electric vehicles (BEVs): a base 10% import tariff plus an additional 35% countervailing duty. "The regulatory framework for BEVs has already proven effective — we're competitive on price there — but no such balance yet exists in the PHEV segment."

A June 19 report by Germany's Handelsblatt cited senior officials and industry sources confirming the EU is indeed evaluating the feasibility of imposing additional tariffs on Chinese-made PHEVs. Notably, PHEVs remain classified by the EU as a key transitional technology toward carbon neutrality, with many member states offering purchase tax incentives — further eroding the price advantage of conventional internal-combustion vehicles.

Data shows that in H1 2026, Chinese brands sold 685,990 new vehicles across Europe — a 101% year-on-year surge, vastly outpacing the overall market growth of 5.9% and lifting their market share from 5% to 9.5% year-on-year. Blum acknowledged: "Chinese competitors face immense domestic pressure — exports have become their sole path to sustaining growth."

Additionally, Blum called for accelerated implementation of the proposed 'Made in Europe' industrial policy — including local production quotas, targeted fiscal support, and regional capacity-binding incentives — to strengthen supply chain resilience and reduce external dependencies.

Notably, while Volkswagen is considering importing low-cost, in-house branded vehicles from China for sale in Europe, Blum explicitly ruled out following Stellantis' and Ford's approach — i.e., opening European factory capacity to Chinese automakers. Ford and GEELY have announced a joint venture to produce electrified vehicles at their Valencia plant in Spain; Stellantis will begin contract-manufacturing Leapmotor vehicles there this year.