How VW Fought EU Tariffs in 2024 — and Demanded Them in 2026

So what changed? The answer lies in two developments: a tariff deal that protected VW's own Chinese imports, and a regulatory loophole that let Chinese brands race past its best-selling model.

Why VW opposed tariffs in 2024

In 2024, Volkswagen was vulnerable to broad EU tariffs. The company produces the Cupra Tavascan and other EVs at its Chinese factories for export to Europe, so across-the-board duties would have directly hit its own imports . VW's brand leader Thomas Schäfer warned that tariff hikes could lead to "retaliation" against global brands operating in China .

The deal that changed everything

By February 2026, the European Commission accepted a VW price-commitment deal. Under this arrangement, VW's Chinese-built battery electric vehicles (BEVs) were exempted from tariffs in exchange for a minimum import price and a sales quota . The move created a precedent for model-specific tariff exemptions .

Once VW's own imports were protected, the downside of higher tariffs on competitors disappeared.

The loophole and the surge

The EU's 2024 tariffs targeted battery electric vehicles (BEVs), not plug-in hybrids. Chinese automakers exploited this gap aggressively . By mid-2026, the results were stark:

• Volkswagen's Tiguan PHEV, Europe's best-selling plug-in hybrid in 2024, dropped to fourth place within a single year .
• Three Chinese brands took the top three spots: the BYD Seal U, BYD Atto 2, and Jaecoo 7 .
• Chinese brands captured 27.3% to 28.3% of Europe's PHEV market in the first half of 2026, according to Dataforce . In absolute terms, PHEV sales by Chinese brands exceeded 20,000 units in the first six months .

VW's own lobbying helped create the problem

Multiple reports note that VW pushed to keep the original EU tariffs soft enough that Chinese PHEVs could continue entering Europe at low rates . The Autowire reported that "eighteen months ago, its own lobbying helped make sure the last round of tariffs came in soft enough for Chinese brands to keep winning anyway" . That decision backfired once Chinese brands overtook VW's own models.

The cost crisis at home

Volkswagen faces severe cost pressure. The company has threatened to close four German factories, including the all-electric Zwickau plant in Saxony . Germany's economy minister in Saxony, Dirk Panter, explicitly linked higher tariffs to protecting VW's domestic production base . With internal cost-cutting proving painful and slow, tariff protection has become a more attractive short-term option.

What comes next

The EU was already preparing tariffs on Chinese plug-in hybrids by June 2026, aiming to close the loophole that let brands like BYD sidestep electric-car duties . The European Commission has established a framework allowing automakers to voluntarily limit EV exports from China in exchange for tariff relief . Whether VW's late reversal will be enough to slow the Chinese advance remains an open question.