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China, EU Agree to Ease Dispute Over Chinese EV Imports

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Key Takeaways

  • China and the EU signaled willingness to ease their EV dispute, considering price commitments.
  • EU officials said any minimum prices must offset subsidies, with proposals judged under WTO rules.
  • BYD Company Limited outsold Tesla in Germany and the UK as China-made vehicles gained share in EU sales.

China and the European Union (EU) have taken steps toward easing their dispute over EU imports of electric vehicles manufactured in China. Per the EU, any minimum import prices would need to be set high enough to offset the harmful impact of subsidies, and planned investments by Chinese EV makers within the bloc would also be taken into account.

Per European Commission spokesperson Olof Gill, the EU market remains open to EVs from around the world as long as competition is fair. If those conditions are met, the bloc is prepared to seriously consider price commitments. The Commission added that all proposals would be evaluated objectively and without discrimination, in line with World Trade Organization rules.

Per China’s Commerce Ministry, the move would support the healthy development of China-EU trade ties and help protect the rules-based global trading system. The China Chamber of Commerce to the EU also welcomed the development, saying it could lead to a smoother resolution of the EV dispute.

Tensions had escalated after the EU launched an anti-subsidy investigation into Chinese EVs and imposed countervailing tariffs ranging from 7.8% to 35.3% for five years in late 2024. EU officials argued that heavily subsidized, low-priced Chinese EVs posed a risk of economic harm to European automakers.

The latest announcement follows the EU’s decision last month to review whether a price undertaking proposed by a Chinese joint venture of Germany’s Volkswagen Group could replace the existing anti-subsidy tariffs on its China-built EVs. China-made vehicles accounted for 6% of EU auto sales in the first half of 2025, up 5% year over year, per data from the European Automobile Manufacturers’ Association and S&P Global Mobility.

Sales & Expansion Efforts of Chinese Automakers in Europe

BYD Company Limited (BYDDY - Free Report) marked a significant turning point in Europe’s auto market after outselling Tesla, Inc. (TSLA - Free Report) in the region’s two largest electric-vehicle markets, Germany and the United Kingdom, last year. In Germany, BYD posted an eightfold jump in annual sales to 23,306 vehicles, while registrations for Tesla dropped by nearly 50% to 19,390, per data from the Federal Motor Transport Authority. In the United Kingdom, BYD also moved ahead of Tesla. It finished the year with 51,422 vehicle registrations compared with 45,513 for Tesla.

Geely Automobile Holdings Limited (GELHY - Free Report) expanded its European footprint by entering new markets during 2025. In the third quarter, Geely launched the Geely EX5 electric vehicle and began official operations in Poland through a network of sales outlets and dealerships. Later in the year, Geely made its formal debut in Italy with the Geely EX5 and a plug-in hybrid model, adding another European market to its growing regional presence.

While GELHY has a Zacks Rank #3 (Hold), TSLA and BYDDY carry a Zacks Rank #4 (Sell) each at present.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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