Chinese Carmaker Circumvents EU Tariffs With Thai Workaround

BYD has found a way to deliver electric vehicles to Europe tariff-free—just before its new Hungarian plant comes online.

BYD Finds a Loophole in EU Trade Barriers

To avoid steep import duties on Chinese EVs, BYD has begun routing vehicles through its Thai facility—circumventing the tariffs aimed at protecting European automakers.

Hungarian Plant Set to Launch This Year

BYD confirmed at the Munich Motor Show that its Hungarian plant will start producing the Dolphin Surf model by year-end, solidifying its long-term presence in Europe.

Thai Imports Are Already Reaching Europe

The first batch of tariff-free EVs has landed in countries like Germany, Belgium, and the UK, thanks to BYD’s use of its Thailand-based production route.

How the Thai Workaround Functions

BYD assembles vehicles in Thailand using CKD kits—parts manufactured in China, shipped to Thailand, and reassembled—qualifying them for lower or zero tariffs under current EU rules.

Competitive Threat to European Brands

Lower production costs and tax-free entry allow BYD to price vehicles more competitively, potentially undercutting brands like Renault, Citroën, and Volkswagen.

Why the EU Imposed Tariffs in the First Place

The European Commission raised import duties to counteract Chinese state subsidies, which were deemed to give unfair advantage in the European market.

BYD’s Global Ambitions Keep Growing

With over 2.4 million vehicles sold globally in the first seven months of 2025, BYD is aiming for more than 5 million this year—even if that goal might be out of reach.

A Bigger Shift on the Horizon

As production in Hungary ramps up, BYD’s presence in Europe is only set to expand—potentially reshaping the region’s EV market in the process.