Are Chinese Electric Vehicles Still ‘Cheap’ in the EU? How EV Tariffs and Minimum Price Rules Could Change EV Prices in 2026
28.01.2026
4 mins to read
Are Chinese EVs Still ‘Cheap’? How Tariffs and Minimum Price Rules Could Change EV Prices in 2026
Will Chinese electric vehicles remain Europe’s most affordable option in 2026, or is the era of ultra-cheap imports coming to an end? This question is now at the forefront of the automotive industry. The European Union is preparing a new regulatory framework that combines tariffs and minimum price mechanisms. If Chinese EVs helped accelerate electrification through aggressive pricing, what happens when governments step in to reset the rules? Let us take a closer look at how trade policy may redefine EV pricing this year.
Why 2026 matters for Chinese electric vehicle pricing
Following a 2024 investigation, the European Commission found that state subsidies gave Chinese electric vehicles an unfair advantage. To protect local manufacturers and balance the market, the EU has now applied new import taxes on these vehicles.
Building on this decision, in January 2026, the European Commission released a formal Guidance Document outlining how Chinese EV exporters may propose price undertaking offers. In short, this brings a binding commitment to sell vehicles at a defined minimum import price, rather than paying tariffs.
According to the Commission, this approach aims to neutralise the effects of subsidies while maintaining market access, provided that minimum prices offer an economic effect equivalent to tariffs.
How EU EV minimum price rules work in practice
Under EU trade law, a price undertaking must satisfy strict conditions to be accepted. These requirements are designed to prevent circumvention and ensure that competition distortions are fully addressed.
| Requirement | Regulatory Objective |
| Minimum import price | Offset the benefit of state subsidies and mirror the impact of countervailing duties |
| Defined sales channels | Ensure all EU-bound vehicles are covered by the price commitment |
| Anti-cross-compensation | Prevent price manipulation between different EV models or trims |
| Transparency obligations | Allow EU authorities to monitor compliance and pricing behaviour |
This framework directly affects how aggressively Chinese manufacturers can price their vehicles in Europe.
Expected price undertaking for 2026
If minimum price undertakings are widely adopted in 2026, Chinese EVs may no longer undercut European competitors to the same extent. Reuters reports that EU officials see price floors as a way to stabilise the market while avoiding a full trade escalation.
The European Commission has clarified that minimum prices may be set per vehicle model, meaning entry-level EVs could experience the largest relative price increases compared to premium segments.
Meanwhile, China’s Ministry of Commerce confirmed that both sides are working toward mutually acceptable implementation rules that comply with World Trade Organization principles. It is a clear signal that price undertakings are intended as a long-term solution rather than a temporary fix.
Who feels the impact most? Chinese EVs?
The automotive ecosystem will experience uneven effects once minimum prices replace or complement tariffs:
- Chinese EV manufacturers may preserve EU market access but lose flexibility to compete purely on price.
- European automakers gain breathing room as price pressure from subsidised imports eases.
- Consumers may see fewer ultra-budget EV offerings, particularly in the small-car segment.
- Supply chains and investors benefit from clearer regulatory expectations, supporting long-term planning.
More than pricing: strategic automotive consequences
Beyond sticker prices, minimum price rules may influence where vehicles are produced. Chinese OEMs could accelerate local EU manufacturing investments to reduce exposure to import rules, a possibility acknowledged by EU officials during the guidance process.
From a global perspective, the EU-China EV dispute is increasingly viewed as a benchmark case for handling subsidised green technologies under international trade law.
A new ruleset for the European EV tariffs
So, will Chinese EVs still be ‘cheap’ in 2026? Probably not in the way European consumers have come to expect. With minimum price commitments and tariffs shaping the market, Chinese EVs are likely to remain competitive. However, they will no longer be disruptively inexpensive. Instead, 2026 could mark the transition from a price-war era to a more regulated, strategically balanced phase of global EV competition. Whether this leads to a stable truce or a full-blown trade war remains to be seen. For now, the industry remains on high alert, waiting for the first move in this new, high-stakes game.
Sources:
https://ec.europa.eu/commission/presscorner/detail/en/ip_24_5583
https://english.www.gov.cn/news/202601/12/content_WS6964f6b1c6d00ca5f9a08897.html
