Market evolution: Other motor cars (CN 870390) — 2015–2025

Introduction

This report examines the evolution of European Union trade in motor vehicles classified under customs code CN 870390 over the period 2015–2025. This subheading is a residual category within heading 8703, covering passenger vehicles equipped with powertrains that are neither traditional internal combustion piston engines nor pure electric motors. Historically, this code has captured vehicles with alternative or hybrid propulsion systems—including plug-in hybrids, hydrogen fuel cell vehicles, and other non-standard powertrains—that do not fit neatly into the more specific diesel, petrol, or battery-electric subheadings.

The data reveals a striking and near-total collapse in both extra-EU imports and exports over the decade. Total import value fell from €560 million to just €20 million (–96.4%), while export value declined from €1.43 billion to €58 million (–95.9%). This report interprets these dramatic shifts in light of structural changes in vehicle classification, evolving powertrain technologies, regulatory developments, and macroeconomic shocks—including the COVID-19 pandemic, semiconductor shortages, and Brexit.

I. A Structural Reclassification Rather Than a Real Market Collapse

The scale of decline is too uniform to reflect demand shifts alone

The decline in CN 870390 trade is remarkable for its consistency across virtually all indicators. Between 2015 and 2025, EU exports fell by 95.9% in value, 89.6% in mass (from 78,804 to 8,180 tonnes), and 83.2% in vehicle count (from 56,348 to 9,483 units). Imports experienced a comparable contraction: –96.4% in value, –95.7% in mass, and –88.9% in unit count. These declines affected every major trading partner and every major EU Member State with essentially no exception.

Source: General Overview

The sheer breadth and depth of this decline—independent of geography, flow direction, or price—strongly suggests that the primary driver is tariff reclassification rather than a genuine evaporation of demand for alternative-powertrain vehicles. In fact, the European market for hybrid and other non-conventional vehicles expanded enormously over this period, which is fundamentally incompatible with a real 96% contraction.

EU production remained comparatively resilient, confirming a classification shift

Production data for CN 870390 shows a far more moderate decline: output fell from 41,948 units to 30,000 units (–28.5%) and from €802 million to €400 million in value (–50.1%). This is a significant contraction, but it is nowhere near the 83–89% declines observed in trade volumes. If the underlying market had truly collapsed, production would have fallen in lockstep with trade. Instead, the divergence between production and trade trajectories is a strong indicator that vehicles originally classified under CN 870390 progressively migrated to other tariff codes—most likely to the more specific diesel, petrol, or electric subheadings—as customs interpretations matured and as the powertrain landscape became more clearly delineated in the Combined Nomenclature.

Source: Production volumes

Trade intensity and export propensity surged, underscoring the denominator effect

Paradoxically, as absolute trade volumes collapsed, trade intensity rose from 7.6% to 27.2%, and export propensity climbed from 5.5% to 23.7%. These ratios—trade as a share of production—increased because production declined less rapidly than trade. This is consistent with a scenario in which domestically produced vehicles are progressively reclassified out of CN 870390 for domestic sales (recorded in production figures) while residual trade flows in this code represent a shrinking pool of vehicles that still fall within the tariff definition, inflating the ratio.

II. Every Major Partner Experienced an Abrupt and Near-Total Decline

The United Kingdom: Brexit and the single largest partner collapse

The United Kingdom was by far the EU's largest trading partner in CN 870390 throughout most of the period. It was the top import source (€350 million in 2015, peaking at €423 million in 2017) and the third-largest export destination (€287 million in 2015). By 2025, UK imports had fallen to just €5.1 million (–98.5%) and exports to the UK to €946,000 (–99.7%).

Source: Top partners

The UK's departure from the EU Single Market and Customs Union on 1 January 2021 fundamentally altered the trade relationship. Many UK-manufactured vehicles that previously flowed freely within the EU are now subject to customs declarations, rules of origin, and potentially different tariff classifications. Furthermore, the volatility coefficient for UK imports (2.03) and exports (1.71) confirms the extreme instability introduced by Brexit alongside the classification changes. The UK data shows a sharp inflection around 2020–2021.

Asian suppliers: Japan and Korea saw the steepest proportional losses

Japan and South Korea were the second- and third-largest import sources for CN 870390. Japanese imports collapsed from €80 million to €516,000 (–99.4%), while Korean imports fell from €93 million to €6.2 million (–93.3%). The volatility coefficient for Japan (1.86) and Korea (1.79) confirms persistent instability. Notably, a major price shock was detected for Japanese exports in 2021, with an abnormality score of 33.3 and a price shift of +813.9%, likely reflecting the near-total disappearance of volumes and the resulting distortion in per-unit pricing as only small, high-value residual shipments remained.

Emerging export markets: Egypt and Algeria as rare bright spots

Against the backdrop of near-universal decline, two North African destinations bucked the trend. EU exports to Egypt rose from a negligible €8,500 to €3.9 million (+45,508%), and exports to Algeria grew from €48,000 to €17.8 million (+36,768%). While these remain small in absolute terms, they represent a geographical diversification away from the traditional markets of Norway, the United States, and the United Kingdom, which collectively lost over €1.1 billion in export value. Ukraine also showed moderate growth, with exports rising from €1.7 million to €2.6 million (+52.3%), though with significant year-to-year volatility.

All major EU Member States saw their roles diminish

Among EU Member States, Germany was the dominant exporter (€982 million in 2015) and Italy the leading importer (€167 million). By 2025, Germany's exports had fallen to just €1.1 million (–99.9%) and Italy's imports to €784,000 (–99.5%). France showed the greatest relative resilience among exporters, declining from €142 million to €30 million (–79.1%), which is notably less severe than other Member States and aligns with France's strong position in CN 870390 specialisation (RSCA of 0.66 in 2025, the third-highest in the EU after Denmark and Lithuania).

Source: Top reporters

III. Prices, Concentration, and Vulnerability Indicators Reflect a Niche Market in Transition

Unit prices diverged, revealing a shift in the product mix

An intriguing pattern emerges from the price data. Export prices per tonne fell from €18,175 to €7,118 (–60.8%), and export prices per vehicle collapsed from €25,417 to €6,140 (–75.8%). This suggests that the vehicles remaining in CN 870390 are, on average, significantly smaller and lower in value than those classified under this code a decade ago. By contrast, import prices per tonne fell more moderately (from €13,681 to €11,541, –15.6%), while import prices per vehicle fell from €7,079 to €2,304 (–67.4%). The divergence between mass-based and unit-based price declines indicates that the average vehicle mass has decreased over time within this category, consistent with smaller or lighter alternative-powertrain vehicles remaining classified here.

Source: General Overview

Market concentration declined as the residual pool diversified

The Herfindahl-Hirschman Index (HHI) for imports by partner fell from 4,400 to 2,064 (–53.1%), and for exports from 2,441 to 1,227 (–49.7%). In value terms, import concentration fell from a highly concentrated level (above 2,500, often used as a threshold for high concentration) to a moderately concentrated one. This diversification is somewhat counterintuitive: as absolute volumes shrank, one might expect concentration to increase as only a few niche suppliers survived. Instead, the data suggests that the small remaining trade is spread across a wider set of partners, possibly reflecting one-off or sporadic shipments rather than established commercial channels.

The EU shifted from marginal net importer to net exporter

The net import reliance indicator moved from –3.3% in 2015 to –23.2% in 2025, with a trough of –38.0% around 2019–2020. Negative values indicate the EU was a net exporter in this category. The deepening of this negative value means the EU's net exporter status intensified in relative terms, even as both imports and exports collapsed. This is because imports fell slightly faster (–96.4%) than exports (–95.9%), widening the proportional gap. In practical terms, the EU's trade surplus in CN 870390 narrowed from €872 million to just €38 million, but the remaining flows still favour exports.

Specialisation reveals France and Denmark as residual anchors

The revealed comparative advantage analysis for 2025 shows Denmark (RSCA = 0.80), Lithuania (RSCA = 0.78), and France (RSCA = 0.66) as the most specialised EU Member States in CN 870390 exports. At the other end of the spectrum, Portugal (RSCA = –0.99), Austria (–0.96), and Poland (–0.94) show no meaningful specialisation. France's prominence is notable: it accounts for 38.5% of total EU production value in this category, suggesting that certain French manufacturers (historically, this has included producers of hydrogen fuel cell vehicles and niche hybrid models) continue to find the CN 870390 classification relevant for their products.

The 2021 price shocks signal disruption, not growth

Three significant shock events were detected in the data:

The Japanese and Swiss price shocks in 2021 almost certainly reflect the collapse in volumes to near-zero levels, causing extreme per-unit price distortions rather than genuine price increases. The US supply shock in 2025—with a –99.5% volume shift affecting 27% of export value—represents the near-complete disappearance of what was once the EU's second-largest export market for this product, consistent with the broader reclassification trend reaching its final stages.

Conclusion

The decade 2015–2025 witnessed the near-total disappearance of EU extra-EU trade in CN 870390, with both imports and exports declining by approximately 96% in value. This report concludes that the dominant explanation is systematic tariff reclassification rather than a genuine market contraction. The evidence is compelling: production declined far more moderately (–28.5% in volume, –50.1% in value) than trade; the decline was universal across all partners and Member States; and the European market for hybrid and alternative-powertrain vehicles has grown dramatically over this period. As the Combined Nomenclature and customs practice evolved to accommodate the rapidly changing powertrain landscape—particularly the rise of plug-in hybrids, mild hybrids, and battery-electric vehicles—vehicles that were initially classified in the residual CN 870390 category were progressively reassigned to more specific codes that better reflect their primary propulsion system.

The remaining small trade flows in CN 870390 likely represent genuinely niche vehicles—hydrogen fuel cell cars, experimental prototypes, or other powertrains that do not fit elsewhere. The declining unit prices and the emergence of new, small-scale export destinations (Egypt, Algeria) suggest that the residual market is increasingly fragmented and niche. For policymakers and industry analysts, CN 870390 data should be interpreted with caution: its dramatic decline tells us more about the evolution of tariff classification practice than about the health of Europe's alternative-powertrain vehicle industry, which in reality has undergone a period of rapid expansion.