Chinese sees highest drivetrain share across PHEVs across Europe thanks to tariff mitigation
- Matthias Schmidt
- 19 hours ago
- 2 min read
The outlook is likely to become increasingly shaped by localisation. With European production expected to begin in Q4, initially focused on BEVs, Chinese OEMs should be better positioned to sustain BEV volumes while reducing tariff exposure. PHEV imports are likely to remain front-loaded ahead of any potential expansion of the anti-subsidy regime. If ICE models remain outside its scope, Chinese OEMs may increasingly favour non-plug-in models, although this would raise fleet CO₂ averages and reduce the potential benefit from regulatory pooling credits.
While Chinese OEMs saw their highest individual share of drivetrain come from PHEVs, accounting for 26% of all PHEVs entering the Western European market during Q2 2026, and rising above 30% in June, PHEVs returned the lowest volumes across all drivetrains. This partly highlights incumbents departing PHEVs, as a utility-factor change indicates CO2 values and limits the business case, especially as BEVs become more competitive. Chinese OEMs are keen to focus on PHEVs, given they are not part of the EU's anti-subsidy tariff scope.
More broadly, the strategy remains driven by utilisation economics.
As the Chinese domestic market slows, OEMs have a growing incentive to protect factory utilisation and maintain throughput across vertically integrated logistics networks, including their expanding fleets of PCTC vessels.
This suggests European exports will remain strategically important even where market profitability is constrained, as manufacturers seek to optimise global capacity utilisation rather than purely maximise European margins.
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Scope: Western Europe's 18 Markets: EU Member States prior to the 2004 enlargement, plus EFTA markets Norway, Switzerland, Iceland, plus UK – accounting for 90% of the enlarged European region.
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