What were the biggest headlines in the global auto industry this week?
EU plans new tariffs on China-made PHEVs
The European Commission is planning to slap new tariffs on plug-in hybrid vehicles (PHEVs) imported from China, according to a report by German newspaper Handelsblatt.
Citing senior EU officials and industry insiders, the report notes that the Commission has completed its preparations and could roll out the tariffs swiftly once it secures backing from a majority of member states.
Image Source: EU
The move targets PHEVs produced by Chinese manufacturers like BYD, Chery, and SAIC. The rationale: after the EU imposed countervailing duties of 17% to 35.3% on China-made pure electric vehicles (BEVs) in November 2024, automakers pivoted sharply from BEVs to plug-in hybrids, rapidly expanding their share in Europe's PHEV market.
If implemented, the specific rates could align with the countervailing duties already levied on China-made BEVs and extended-range electric vehicles (EREVs). That would mean an additional surcharge of up to 35% on top of the EU's standard 10% import tariff.
The European Commission declined to comment on the report.
Gasgoo Take: When rules clash, it’s the European consumer seeking value who ultimately pays the price. The so-called "anti-subsidy" measures are little more than industrial protectionism in disguise.
European market edges up; Chinese brands hit record 10.7% share in May
Despite tariff barriers, automakers like BYD, Chery, and SAIC's MG are accelerating their push into Europe, according to a global automotive outlook report by AlixPartners. The consultancy forecasts that Chinese automakers could capture 16% of the European market by 2030.
"Even as competition intensifies and demand saturates, Chinese automakers are flooding in," said Stephen Dyer, head of AlixPartners' Asia Pacific automotive practice. He added that these brands are cannibalizing the market share of European incumbents while overall sales volumes remain flat.
For Chinese automakers, a major European expansion is both an opportunity and an inevitability. Strict emissions regulations, robust charging infrastructure, and strong consumer demand make the region an ideal fit for new energy vehicles. At the same time, slowing sales and fierce competition at home are forcing Chinese brands to seek growth overseas.
Preliminary data from market research firm Dataforce shows European new car sales edged up just 3.4% year-on-year in May to 1.13 million units. Yet sales of Chinese brands surged 97% to 121,030 units, pushing their market share to a record 10.7% for the month.
AlixPartners predicts Chinese exports will accelerate this year, with total overseas shipments climbing from 7.1 million in 2025 to at least 10 million. Dyer noted that export focus is shifting from Russia and Belarus toward core Western European markets like France and Germany. Acceptance is particularly high among young German consumers: survey data shows 36% of Germans aged 18 to 34 prefer Chinese cars over domestic brands.
Gasgoo Take: The EU tried to wall off BEVs, only for Chinese automakers to circle back with PHEVs. It proves that the "technology plus cost" combo moves faster than trade barriers—and the anxiety of Germany's big three is well-founded.
Voyah's Lu Fang: Car prices likely to rise as raw materials surge
At the World Economic Forum's Annual Meeting of the New Champions on June 24, Voyah Chairman Lu Fang shared his outlook on pricing. He noted that prices for raw materials—ranging from steel and aluminum to batteries and petrochemicals—are rising across the board. In this environment, merely holding the line on current prices is a challenge; cutting prices defies industrial logic.
Image Source: Voyah
Lu argues that as long-life products, car prices must cover not just the purchase but the value of after-sales service. Prolonged negative margins are unsustainable and ultimately unfair to consumers. While automakers are under immense pressure to offset rising costs through efficiency gains and better management, completely absorbing those hikes is unrealistic.
Lu believes price hikes are likely. High-end models, with thicker margins, have some buffer, but cost-sensitive low-end vehicles will be hit first—some may even face production cuts or market exit. His advice to consumers: if you're planning to buy, do it sooner rather than later.
Gasgoo Take: The price war has pushed margins into the red; continuing this race to the bottom will wipe out the industry. It might be time to use the raw material surge as a graceful exit strategy.
Honda struggles in China, leaving parts suppliers deep in anxiety
Honda's production cuts in China are sending shockwaves through its supplier network. Many partner companies expect revenue declines, and combined with cost pressures, dissatisfaction is brewing within the sector.
A Nikkei review of financial reports for nine top listed parts suppliers on the Tokyo Stock Exchange found that all derive more than 40% of their revenue from Honda. Five of them forecast a year-on-year decline in global revenue for the current fiscal year ending March 2027, while three expect global net profits to shrink.
Gasgoo Take: Tier 1 suppliers tied to a single Japanese client spent the past three decades feasting on Honda's growth in China. Now, they are swallowing the bitter pill of de-Japanization. In this transition, being one step behind means losing the game.
ECX to acquire Flyme software business in 1.8 billion yuan deal
On June 22, ECX (Nasdaq: ECX) announced it has signed a definitive agreement to acquire the Flyme software business, including two core products: the Flyme Auto smart cockpit operating system and the cross-terminal Flyme OS.
The deal totals 1.8 billion yuan. By acquiring Hubei Qiguang Technology—a entity spun off from Xingji Meizu Group for this transaction—ECX gains the Flyme Auto and Flyme OS platforms, along with associated IP, R&D teams, engineering resources, and mass-production programs. The move is designed to bolster its core competitiveness in smart cockpit software.
Image Source: ECX
Following the acquisition, ECX will establish an independent software division to run the Flyme business, ensuring uninterrupted R&D and seamless service for automaker clients. ECX will also inject an additional 200 million yuan into Hubei Qiguang to fund ongoing R&D and business expansion. User data, however, will remain with Meizu, which will continue to handle operations and maintenance.
Additionally, ECX will continue to support iterative upgrades for the Flyme platform and its entire OS family, with a focus on developing an AI Agent version. Later this year, existing Meizu smartphone users will receive a major system upgrade, and the new Flyme Auto 3.0 in-vehicle system will officially launch, further enhancing product experience and intelligence.
ECX plans to leverage the Flyme R&D team to refine the integrated phone-car experience, drive AI integration across multi-terminal scenarios, and expand its smart cockpit software licensing business to global automakers.
Gasgoo Take: By consolidating software assets into the listed entity, Shen Ziyu is setting the stage for a much more compelling narrative for capital markets.
