New tariffs imposed by the European Union in July significantly curtailed the influx of Chinese-made electric vehicles, as the bloc sought to protect its domestic auto industry from intensifying competition.

Chinese EV sales across Europe plunged 45%. While this steep decline may partly reflect a pre-tariff surge, the provisional duties, reaching as high as 48%, are designed to safeguard the EU’s automotive sector from Chinese rivals benefiting from substantial state subsidies in areas such as battery technology.

Despite the slowdown, Chinese brands’ overall performance mirrors the broader 36% drop in EV sales across the 16 EU countries analyzed. Notably, even Western automakers like BMW, Stellantis, and Tesla, which import Chinese-made EVs, are affected by the tariffs.

While July’s figures indicate a temporary setback, Chinese manufacturers remain committed to the European market. Their combined share rose to 8.5% in July from 7.4% a year earlier. However, the industry faces broader challenges as global EV growth decelerates.

BYD, for instance, tripled its sales compared to the previous year, but MG experienced a 20% decline. Despite the tariffs, BYD is expanding its European footprint, including a new plant in Hungary.

The EU’s decision to impose tariffs follows a one-sided investigation concluding that Chinese EV subsidies unfairly harm European automakers. With the levies set to become permanent in November unless a deal is reached, the industry faces a complex balancing act between protecting jobs and accelerating the transition to electric vehicles.