European automakers’ organisations welcomed China’s agreement to halve imports of hybrid vehicles to the European Union, but commentators were not so sure and worried about the details.

China agreed to halve hybrid and plug-in hybrid vehicle exports to the EU. The EU will also have improved access to China’s market and China has also agreed to make it easier for EU companies to license rare earth exports. The deal is part of the EU’s attempt to cut the trade deficit with China, said to exceed $1 billion a day.

Experts pointed out that China agreed to halve projected exports to the EU over the next four years, so actual sales could continue growing

The European Automobile Manufacturers Association , known by its French acronym ACEA, welcomed the interim deal, subject to approval by politicians.

“The sudden and rapid rise in imports of plug-in hybrid electric vehicles (PHEVs) and hybrid electric vehicles (HEVs) from China is having a destabilizing effect on the European car market. In H1 2026, the market share of Chinese brands in Europe was 14% for hybrid electric vehicles, up from 2% in 2024, and 25% for plug-in hybrids, up from 2% in 2024,” ACEA said in a statement.

“A sharp and sudden destabilization of the market in Europe, along with price wars that mirror the current market situation in China, would be highly disruptive to the European economy as whole,” ACEA said.

“Today’s announcement can help facilitate the transition to a new era of Chinese presence in the European market in an orderly way and this is in the long-term interests of all parties,” according to ACEA.

The German auto makers association VDA also liked the deal but wanted more details before commenting further.

Dr Michael Putz, managing partner at Automodicted consulting, wasn’t impressed.

“Did Brussels just stop the Chinese car wave? No. It agreed to a smaller wave than the one it was forecasting,” Putz said in a LinkedIn post.

Global automotive consultants AlixPartners recently increased its forecast for Chinese brand share of European auto sales in 2030 to 20%, up from 16% made only three months before. For 2026, the share is likely to be close to 10%. In 2021 China’s share was 0.5%. The EU has already tried to curb Chinese electric vehicle sales with anti-subsidy duties of up to 35.3%, on top of the standard 10% car import duty.

“To be fair to Brussels, this is the first time Beijing has agreed to curb exports without a trade investigation. Easier rare earth licensing and better market access for EU goods are real wins, for the car industry and well beyond it,” Putz said.

“But none of it is a signal for European (manufacturers) to lean back. The understanding still needs sign-off from EU leaders on 15 and 16 October, and the mechanism is not yet defined. At best this is a short breather in the eye of the storm,” Putz said.

Reuters’ Breaking Views wasn’t impressed either, in a column headed “The unbearable lightness of an EU-China half-deal”. It described the deal as a partial agreement which was hampered by unresolved divisions in Europe. France has been demanding more protectionism, while Germany is concerned about jeopardizing its considerable, but falling, export business to China.