Market evolution: Diesel plug-in hybrids (CN 870370) — 2015–2025

Introduction

This report analyzes the European Union's external trade in diesel plug-in hybrid vehicles (Combined Nomenclature code 870370) over the period from January 2015 to December 2025. This product category specifically covers motor vehicles with fewer than 10 seats that are equipped with both a diesel engine and an electric motor and are capable of being charged from an external power source. The analysis is based on available trade data from 2017 onward, as prior years show no recorded flows. Over this period, the EU transitioned from being a significant net exporter to a major net importer of these vehicles, reflecting a profound shift in the continent's production capabilities, trade relationships, and strategic positioning within the global automotive market. The following sections detail and interpret these key dynamics.

1. A Dramatic Trade Balance Reversal Driven by Soaring Imports

The most striking feature of the EU's trade in diesel plug-in hybrids is the complete inversion of its trade balance. What began as a robust surplus transformed into a substantial deficit, driven almost entirely by an exponential increase in imports.

The shift from a trade surplus to a large deficit

In 2017, the EU enjoyed a healthy trade surplus of €47.6 million in this product category. By 2025, this had reversed into a deficit of €444.8 million. The net import reliance metric vividly illustrates this shift, moving from -45.3% (indicating a strong export orientation) to -11.2% (indicating a solid import dependence). This reversal underscores a fundamental change in the EU's role in this specific market segment.

Import growth vastly outpaced that of exports

The expansion of imports was of a different magnitude compared to exports. From 2017 to 2025, the value of EU imports surged by an extraordinary 8,307%, rising from €8.3 million to €698.4 million. In volume terms (net mass), imports grew by 5,214%. In contrast, the value of exports grew by a robust but far smaller 354%, reaching €253.6 million in 2025, with volume growing 243%. The table below summarizes this asymmetric growth.

Source: General Overview - Trade

The United States emerged as the dominant import source

The explosive import growth was overwhelmingly fueled by a single partner: the United States. In 2017, imports from the US were negligible (€402). By 2025, they had ballooned to €635.3 million, accounting for over 90% of the total import value. This points to a specific and powerful shift in supply chains, likely related to the production strategies of major automotive manufacturers. While other partners like South Africa and the United Kingdom also showed strong growth, their absolute volumes remained an order of magnitude smaller. Conversely, earlier suppliers like Mexico and South Korea saw their exports to the EU almost completely collapse.

2. Shifting Geographies: Concentrated Sourcing and Diversified Export Markets

The changing trade flows were accompanied by a notable reshaping of the EU's trade partnerships. Import sources became more concentrated, while export destinations became more diversified, reflecting differing strategic adjustments on the supply and demand sides.

Import sources became more concentrated

The Herfindahl-Hirschman Index (HHI), a measure of market concentration, increased by 38.2% for imports over the period. This rise signifies a greater reliance on a smaller number of supplier countries, a trend driven primarily by the dominance of the United States. In 2025, the US and South Africa together accounted for nearly 98% of the value of extra-EU imports for this product category. This concentration presents a potential vulnerability in the EU's supply chain for diesel plug-in hybrids.

Export markets diversified significantly

In stark contrast to the import side, the EU's export market for diesel plug-in hybrids became much more diversified. The HHI for exports fell by 80.6%, indicating that exports were spread across a wider array of destinations. The United Kingdom remained the largest single market, but its share fluctuated. The most dynamic growth was seen in exports to Switzerland (+3,593%), Morocco (from almost zero to €70.8 million), and several Balkan nations like Serbia and Ukraine. This diversification helped buffer the EU's export sector against dependency on any single partner.

Key partner volatility reflects market adjustments

The evolution of partnerships was not smooth. Several relationships exhibited high volatility, as measured by the coefficient of variation (CV). For instance, exports to the United Kingdom were highly volatile (CV of 1.46), and exports to Türkiye were extremely so (CV of 2.47), reflecting likely one-off supply contracts or demand fluctuations. On the import side, partners like Mexico (CV 1.37) and South Korea (CV 1.38) showed high volatility due to their near-complete withdrawal from the market. The detection of a price shock for UK exports in 2023 further underscores the instability in key trade flows.

3. Domestic Production Surge and a Retreat from Export Orientation

Beyond the shift in trade balances, the broader market structure data points to a strategic pivot within the EU. A massive expansion in domestic production has been accompanied by a marked decline in the economy's overall openness to trade for this specific product.

EU production capacity expanded dramatically

While the EU was increasing its imports, it was simultaneously building substantial new production capacity for diesel plug-in hybrids. According to the available production data, output volume grew from 24,300 units in the first year to 600,000 units in 2025, an increase of 2,369%. The estimated production value increased from €1 billion to €30 billion over the same period. This indicates a major industrial investment and scaling up of manufacturing within the bloc. Germany was the most specialized producer, with a revealed symmetric comparative advantage (RSCA) of 0.59 in 2025.

Trade intensity and export propensity fell sharply

This production boom was primarily oriented toward serving the domestic EU market, not the global one. The trade intensity index, which measures the importance of trade relative to GDP, plummeted by 72.6%. Even more pronounced was the collapse in export propensity, which measures the share of production that is exported. It fell by 84.6%, from a peak of nearly 400% to just 38.7% in 2025. This means that while the EU was producing vastly more diesel plug-in hybrids, a much smaller proportion of that output was being sent abroad. The system became significantly more self-contained.

Conclusion

The EU's market for diesel plug-in hybrids (CN 870370) underwent a transformative evolution between 2017 and 2025. The period is characterized by three overarching trends: a dramatic reversal from a trade surplus to a deficit, a fundamental reconfiguration of trade geography with concentrated imports and diversified exports, and a massive growth in domestic production that was overwhelmingly absorbed by the internal market. The initial trade surplus was eroded and then overwhelmed by a surge in imports, predominantly from the United States. Simultaneously, the EU built enormous local production capacity, but this capacity was deployed to serve EU consumers, leading to a sharp decline in the economy's export orientation for this specific technology. These dynamics suggest a strategic response to growing regional demand, coupled with a shift in global supply chains, that has reshaped the EU's role from a major exporter to a largely self-sufficient producer and a significant net importer of diesel plug-in hybrid vehicles.