China agrees to EU hybrid-import cap, cutting volume by more than half

Chinese automakers BYD, Li Auto and Changan are pushing aggressively into overseas markets — offering luxury sport utility vehicles, pickup trucks and fast-charging electric vehicles — in a bid to offset slowing domestic sales and increased competition at home, according to a Wall Street Journal Logistics Report newsletter published Thursday.

The reporting, by the Journal’s Ryan Felton and Stephen Wilmot, describes the overseas push by Chinese carmakers that now confront major obstacles in the world’s two largest vehicle markets. In the United States, high tariffs and software restrictions have effectively shut Chinese-made vehicles out of the market entirely.

With the American route closed, the automakers have turned their focus to Europe — even as new restrictions are taking shape there as well.

The Journal’s Brian Spegele and Kim Mackrael reported that China has agreed to a European Union plan to cap hybrid-vehicle imports, a step that bloc officials said should cut the volume of those imports by more than half. European leaders are expected on Thursday to push for additional measures to constrain Chinese imports.

The reliance on exports has become increasingly important for China’s broader economy. Chinese exports climbed 36.3 percent in September, according to data cited by the Journal, even as China’s domestic market has struggled. Factory-gate prices rose at their fastest pace since June 2022 during the same month, the Journal reported.

Stella Li, BYD’s executive vice president, addressed the US market directly. “We don’t need the U.S. market to be number one,” Li said, in remarks quoted by the Journal.

For Chinese automakers, the combination of closed doors in the United States and tightening access in Europe marks a shift from a period in which China’s export machine had appeared all but unstoppable. The country’s reliance on exports to support its otherwise struggling economy means Beijing cannot afford to lose access to the European market, the Journal reported.

In a separate report within the same newsletter, GlobalFoundries said it plans to build two new chip plants in New York using up to $21 billion from Japan — funding tied to the country’s commitment last year to invest $550 billion across strategic US industries such as energy, semiconductor manufacturing and shipbuilding. The Journal’s Kelly Cloonan reported that the factories, to be built in Malta, N.Y., near Albany, will help the company grow its US manufacturing capacity and meet rising demand across automotive, industrial and connected infrastructure markets. GlobalFoundries’ customers include Apple and Cirrus Logic. The United States has sought to strengthen its domestic chip-making capabilities over the past few years to shore up supplies of a component critical in everything from smartphones to data centers; many of the chips in use today are made in East Asia.

The newsletter also reported the following items:

  • Consumer prices were up 3.7 percent in September.
  • The International Energy Agency said a shortage of diesel is set to last into 2027.
  • Houthi militants are attempting to produce their own advanced medium-range ballistic missiles using Chinese-delivered parts.
  • Two Emirati cargo ships sank after being struck in the Strait of Hormuz.
  • US forces destroyed an Iranian-affiliated dhow in the Gulf of Oman after determining the vessel was conducting surveillance, gCaptain reported.
  • Natural-gas exporter Venture Global is joining the race to provide power to the AI boom, aiming to build gas-fired generation at its facilities to supply electricity to data centers.
  • TotalEnergies expects to report exceptional third-quarter results from its downstream business after refining margins jumped.
  • The Federal Maritime Commission plans to impose a fee of $200,000 per port call on Spanish-flagged vessels, ShippingWatch reported.
  • Truck stop operator Pilot opened charging sites for Tesla Semis in California and Georgia, per Commercial Carrier Journal.
  • New York City is awarding $5 million to businesses that move daytime deliveries to overnight, Supply Chain Dive reported.
  • DHL Express transported four rescued manatees from zoos in Ohio to Florida, WKRC reported.