TL;DR
VW’s Tiguan PHEV dropped from #1 to #4 in Europe as BYD Seal U, BYD Atto 2, and Jaecoo 7 overtook it. Blume demands EU PHEV tariffs. Chinese brands hold 28.3% of Europe’s PHEV market.
Volkswagen CEO Oliver Blume is demanding the European Union impose higher tariffs on Chinese plug-in hybrids after the Tiguan PHEV dropped from Europe’s best-selling plug-in hybrid to fourth place in a single year. The BYD Seal U now leads the segment, followed by the BYD Atto 2 and the Jaecoo 7. All three are Chinese. “We have no time to lose,” Blume said during the company’s first-half earnings call.
Chinese brands took 28.3% of Europe’s PHEV market in the first half of 2026, according to Dataforce. The EU already imposed tariffs of up to 35% on top of the standard 10% duty on Chinese battery-electric vehicles, but those levies do not apply to plug-in hybrids. Chinese automakers responded exactly as expected: they pivoted to PHEVs to avoid the tariffs. Chinese car sales in the UK surged to 285,000 last year partly because Britain charges no additional tariff on plug-in hybrids either.
Blume’s argument is that the BEV tariffs are working but the PHEV gap is undermining the policy. “The regulations on BEVs are working. There, we are competitive in terms of pricing. Where it’s not working is with the plug-in hybrids,” he said. Handelsblatt reported the EU is considering additional tariffs on Chinese PHEVs, though timing and rates remain unclear. European automakers are leaning heavily on PHEVs to meet stricter emissions rules, and losing the segment to cheaper Chinese competitors threatens both their compliance strategy and their revenue.
VW is not approaching this from a position of strength. Blume has proposed job cuts that could reach 100,000 employees, double the 50,000 already approved. Geely stopped building new factories and is using Volvo and Ford plants instead to manufacture in Europe without paying import duties. Chinese brands doubled their European sales in a single year to nearly 686,000 deliveries, capturing 9.5% of the total market. Tariffs buy time. Whether VW uses that time to build PHEVs that compete on price is the question the tariffs cannot answer.
