The European Union is intensifying its economic border regime, with existing tariffs on Chinese electric cars reaching up to 35.3% on top of a standard 10% import duty. Calls for even higher tariffs and quotas to protect European manufacturers are gaining momentum, mirroring the escalating measures used to deter human movement across the continent's external frontiers. This protectionist impulse reveals a fundamental hypocrisy: capital is welcomed or restricted based on profit, while people seeking safety or opportunity face criminalisation.
Chinese electric car sales in Europe have surged, with brands like BYD, Chery, SAIC, and Xpeng driving a record 14.2% market share across western European markets in the first five months of this year. This represents 171,800 sales, an increase of nearly five percentage points compared with the same period in 2025. The growth comes as the Chinese industry aims to dominate the global electric vehicle market, placing intense pressure on traditional European manufacturers struggling with tougher emissions rules.
Claims of "dumping" state-subsidised vehicles in the EU and UK are fueling the push for protectionist policies. Yet, the UK has declined to follow the EU’s lead in imposing extra levies, becoming the largest European market for Chinese cars, accounting for a quarter of sales across 18 major western European markets. This divergence highlights the fragmented nature of Europe's economic borders.
Italy, however, accounted for a fifth of the total Chinese BEV sales, a figure Matthias Schmidt, founder of Schmidt Automotive Research, described as an "anomaly." He noted that one manufacturer, Leapmotor, sent thousands of its cheap T03 electric cars into the country, capitalizing on government purchase subsidies. At one point, these subsidies made the T03 as cheap as €5,000, significantly undercutting rival models.
Chinese manufacturers have introduced over 120 different models in Europe this year, surpassing the approximately 100 models offered by European brands. Schmidt suggested that China’s share of the battery electric vehicle (BEV) market might have peaked, partly due to a strategic shift towards plug-in hybrid electric vehicles (PHEVs). These PHEVs, which combine a polluting petrol engine with a smaller battery, are not yet subject to EU tariffs.
Fortress Europe's Economic Walls
Schmidt stated, "I think they are hitting a wall when it comes to pure electric models." He added that manufacturers "will prioritise PHEVs over the next 12 months given hybrids are omitted from extra tariffs placed on BEVs only." This tactical exploitation of tariff loopholes underscores how economic policy prioritizes corporate advantage, even at the expense of genuine climate action. He anticipates that with this "loophole set to close in the next 12 months," companies will "maximise that gap in the door for as long as possible."
Volkswagen chief executive Oliver Blume last month called for changes, asserting that European PHEVs were uncompetitive against Chinese equivalents. The German newspaper Handelsblatt has reported that the EU is now considering extending these levies to PHEVs. This move would further tighten Europe's economic borders, demonstrating a consistent pattern of protectionism for established capital.
The Green Deal's Neoliberal Logic
The focus on tariffs and market protection overshadows the urgent need for a just transition away from fossil fuels. While the EU champions its Green Deal, the debate around electric vehicles reveals a system more concerned with corporate profits and national industrial competitiveness than with climate justice or the global south, which bears the brunt of climate change and subsequent migration. The shift to PHEVs, which still rely on petrol engines, highlights a compromise that prioritizes market strategy over environmental imperative.
Schmidt also noted that "shipping capacity remains limited," meaning "more PHEVs means fewer BEVs, which have likely peaked for now." He predicted that "BEVs will take priority again once local EU production comes online." This indicates a long-term strategy to onshore production, further entrenching a "Europe-first" economic approach. Meanwhile, Tesla sales across Europe rebounded by 60% year-on-year, driven by increased demand for cheaper versions of its Model 3 and Model Y, with the Model Y becoming the bestselling individual model. This shows that capital from certain origins is welcomed, while others face barriers.