Market evolution: Plug-in hybrid cars (CN 87036010) — 2015–2025

Introduction

This report examines the evolution of EU trade in plug-in hybrid electric vehicles (PHEVs) classified under CN 87036010 over the period 2015–2025. The product covers new passenger cars with both a spark-ignition internal combustion engine and an electric motor, capable of external plug-in charging. Data is available from 2017 onward, covering nine years of intra-EU production and extra-EU trade flows.

What the data reveals is a market that has undergone a structural transformation. In less than a decade, PHEVs moved from a niche segment to a mass-market category, with EU production rising from 24,300 to 600,000 units and total trade values growing by an order of magnitude. Yet beneath this headline growth lie important shifts in trade geography, competitive positioning, and supply concentration that carry strategic significance for the European automotive industry.

1. An Order-of-Magnitude Expansion: The Scale of the PHEV Boom

Trade volumes grew far faster than values, reflecting mass-market entry

Between 2017 and 2025, EU exports of PHEVs grew from €2.45 billion to €13.64 billion (+455.7% in value), while imports surged from €655 million to €12.11 billion (+1,747.5%). In physical terms, export tonnage rose from 118,645 tonnes to 556,684 tonnes (+369.2%), while import tonnage jumped from 41,516 tonnes to 755,141 tonnes (+1,718.9%).

The fact that import volumes grew more than four times faster than import values indicates declining average vehicle prices on the import side — a hallmark of market democratization as more affordable PHEV models entered the EU market.

Unit prices diverged between exports and imports

Export unit prices (EUR per unit) rose from €39,960 to €50,470 (+26.3%), reflecting the EU's focus on premium and upper-market PHEVs. By contrast, import unit prices (EUR per unit) grew more modestly from €28,918 to €32,097 (+11.0%), confirming that the import surge was driven disproportionately by lower-priced segments.

Domestic production scaled up at an extraordinary pace

EU PHEV production expanded from 24,300 units (€1 billion) in 2017 to 600,000 units (€30 billion) in 2025. This 24-fold increase in volume and 30-fold increase in value signals both massive industrial investment and the adoption of PHEVs as a mainstream compliance strategy under EU CO₂ regulations. The higher growth rate of production value (+2,900%) versus quantity (+2,369%) suggests a shift toward higher-value PHEV models over time.

2. A Geographical Revolution: China's Ascent and Diversified Import Sources

China emerged as the EU's dominant PHEV import partner

The most dramatic shift in the partner landscape has been the rise of China. In 2017, EU PHEV imports from China were just €21 million; by 2025, they had surged to €3.58 billion — an increase of over 16,800%. This made China the single largest source of PHEV imports by value, overtaking established automotive exporters.

China's rise reflects the rapid electrification strategy of Chinese automakers (particularly BYD, Geely/Volvo, and others) and their increasingly competitive PHEV offerings targeting the European market. The UK's emergence as the second-largest import source (from virtually zero to €1.99 billion) is largely explained by post-Brexit trade reclassification, as vehicles that previously circulated freely within the single market now appear in customs statistics as cross-Channel trade.

Export geography remained anchored in advanced markets

The EU's export destinations remained concentrated in high-income markets, with the United Kingdom (€4.15 billion, +689%), United States (€3.75 billion, +484%), and Switzerland (€952 million, +834%) as the top three. Notably, exports to Norway declined sharply by 82.7%, likely reflecting Norway's strong policy preference for fully battery-electric vehicles (BEVs) over PHEVs. Meanwhile, Korea and Japan emerged as significant new export markets, growing by 8,168% and 335% respectively.

Import concentration declined as supply sources diversified

The Herfindahl-Hirschman Index (HHI) for import value fell from 2,613 to 1,750 (−33%), indicating that the EU's import base became significantly less concentrated. Whereas imports were once dominated by a few traditional suppliers, the entry of China, Türkiye, Mexico, and the UK has created a more diversified supply structure. By contrast, export concentration remained relatively stable (HHI rising modestly from 1,680 to 1,840), reflecting the continued dominance of a few large EU producers in key overseas markets.

3. From Net Exporter to Balanced Trader: Strategic Positioning and Vulnerabilities

The EU's net exporter position eroded but did not reverse

In 2017, the net import reliance stood at −45.3%, meaning the EU was a strong net exporter of PHEVs. By 2025, this had narrowed to −11.2%, a shift of 75.3%. The trade balance, while still surplus, shrank from €1.80 billion to €1.53 billion (−14.8%). At its peak, the surplus reached €3.60 billion. The EU remains a net exporter, but the margin has thinned dramatically as import growth has outpaced export growth.

Trade intensity and export propensity declined sharply

Two indicators reveal the maturation of the market:

• Trade intensity (total extra-EU trade as a share of production) fell from 191% to 52% (−72.6%).
• Export propensity (exports as a share of production) dropped from 251% to 39% (−84.6%).

In 2017, the EU exported more PHEV units than it produced domestically — a pattern consistent with re-exports, transit trade, or production from prior-year inventory. By 2025, exports represented only 39% of production, indicating that the EU's rapidly expanded PHEV manufacturing capacity was increasingly absorbed by the domestic market. This shift reflects the explosive growth of PHEV registrations across EU member states driven by CO₂ fleet targets and national incentive schemes.

Specialisation patterns reveal a core of competitive EU producers

RCA analysis for 2025 identifies the EU member states with the strongest revealed comparative advantage in PHEV exports:

Slovakia and Sweden show the highest specialization intensity, while Germany holds the largest absolute production share (36.0%). At the other end, countries like Portugal, Bulgaria, Denmark, Greece, and Croatia have negligible PHEV production and export activity. This concentration of capability in a handful of member states highlights the uneven geography of Europe's electrification transition.

Import volatility signals emerging supply-chain risks

Volatility analysis (coefficient of variation) reveals that imports from Türkiye (CV 2.04), South Africa (1.76), Morocco (1.79), and China (1.32) are the most volatile. For exports, Türkiye (2.03) and Mexico (0.95) show the highest volatility. While detected price shocks in small markets (Congo, Ghana, Algeria) carry negligible trade-weighted significance, the high volatility of major partners like China and Türkiye warrants monitoring. Rapid year-on-year swings in import volumes from these countries — often exceeding 100% — can create supply-chain planning challenges for EU distributors and dealers.

Conclusion

The EU market for plug-in hybrid vehicles (CN 87036010) has undergone a dramatic transformation between 2017 and 2025. Production scaled from a niche of 24,300 units to a mass-market segment of 600,000 units, while total trade values surpassed €25 billion. The EU retains a net exporter position, but the surplus has narrowed from €1.8 billion to €1.5 billion as imports — particularly from China, Japan, and the UK — have grown at a much faster pace than exports.

Three strategic takeaways emerge from the data:

1. China's arrival as a dominant supplier (from €21 million to €3.58 billion in imports) represents the single most consequential structural shift, reshaping the competitive landscape and pricing dynamics of the EU PHEV market.
2. EU production capacity has matured, but export propensity has collapsed from 251% to 39% of output, meaning the EU is increasingly consuming its own PHEV production rather than exporting it — a sign of both domestic demand strength and potential future export competitiveness challenges.
3. Import diversification is a double-edged sword: while the HHI decline indicates a broader supplier base, the high volatility of several key partners (notably China and Türkiye) introduces new supply-chain risks that were absent when trade was more concentrated among traditional, stable partners.

The PHEV segment sits at a crossroads. As the EU accelerates its transition toward full battery-electric vehicles and tightens CO₂ regulations, the long-term role of plug-in hybrids remains uncertain. What the data makes clear, however, is that whoever dominates PHEV production and trade today is building the industrial capabilities and supply chains that will shape the broader electrification transition of tomorrow.