![\"Euros](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2026\/07\/1784381422_24_0x0.jpg\")
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Euros notes on a European union flag background.<\/p>\n
getty<\/p>\n
It\u2019s no surprise that Chinese auto imports pose an existential threat to even Europe\u2019s most iconic brands. The trouble is, the threat is moving into a higher gear, while European Union actions to mitigate this disaster seem lost in its interminable political process.<\/p>\n
Late last month, global consultancy AlixPartners said Chinese autos now account for almost 10% of the European market and expects this to hit 16% by 2030. Analysts reckon this could go higher.<\/p>\n
The EU does acknowledge the crisis and is currently guiding the Industrial Accelerator Act through the European Parliament. One key reason for the current crisis is the fact that European politicians, when they approved rules on CO2 emissions which started in mid-2021, were apparently unaware that the Chinese industry was maybe five years ahead of Europe\u2019s with a huge cost and technology advantage. Alternatively, they could have been aware, but thought the mayhem which it would cause this crucial European industry was a price worth paying if cutting CO2 emissions could save the planet.<\/p>\n
The IAA, among other things, wants to incentivize small EV production, decide on some dilution of the rules which demand that all new cars have zero carbon dioxide emissions by 2035 (which effectively means only EVs may apply), and perhaps to include plug-in hybrid electric vehicles in the tariff regime. This currently only applies to Chinese EVs. A preliminary finding allowed 10% of sales after 2035 to be non-EV, but the stipulations were harsh, and the auto industry is seeking changes. <\/p>\n
Stephen Dyer, head of AlixPartners\u2019 Asia automotive practice, told a media briefing that Chinese automakers<\/a> were coming in droves, and despite the market being competitive and demand being saturated, were winning market share from European automakers rather than adding to overall growth. <\/p>\n Even German brands are exposed<\/p>\n Leapmotor Automobile booth at a car exhibition in Hangzhou, Zhejiang Province, China on July 1, 2026. (Photo credit CFOTO\/Future Publishing via Getty Images)<\/p>\n CFOTO\/Future Publishing via Getty Images<\/p>\n The German market<\/a>, thought to be the most resistant to any foreign challenges to its beloved Mercedes, Audi, BMW, and Porsche names, is showing a scary (for the big names) weakness to Chinese interlopers. According to Germany\u2019s Center of Automotive Management<\/a>, sales of electric vehicles reached a market share of 28.4% in June and will hit between 850,000 and 800,000 or 25 to 26.7% in all of 2026. The trouble is in the first half, Chinese automakers sold just over 38,000 new EVs, just behind BMW\u2019s 39,772.<\/p>\n \u201cBYD and especially Leapmotor<\/a> are growing particularly strongly. Leapmotor is connected to the European market through a joint venture with Stellantis. Chinese manufacturers are increasingly focusing on electromobility. EVs already account for 42.9% of their total (sales) in Germany,\u201d CAM said in a report. <\/p>\n \u201cBy contrast, the EV shares of Volkswagen, Stellantis, Mercedes and Renault (of France) remain below the overall EV market share of 24.8%. Japanese manufacturers show especially low EV (sales) at 10.7%,\u201d the report said.<\/p>\n U.S.-based Auto Forecast Solutions<\/a> said SAIC\u2019s MG has been leading the charge, but BYD is closing the gap. The Chery brand and its Jaecoo and Omoda names are also making big gains.<\/p>\n A report from Reuters Breaking Views<\/a> this week suggested a saturated Chinese market, where margins were being cut to the bone, was driving the local makers to seek sales abroad, where profit margins looked much juicier. Breaking Views reported that Chinese auto exports hit 1.1 million in June, 70% higher than the same month last year.<\/p>\n Comfortably beat earlier forecasts<\/p>\n \u201cIf that trajectory holds, the country could comfortably beat earlier forecasts of around 10 million sales abroad for the full year,\u201d Breaking Views columnist Katrina Hamlin said.<\/p>\n The European Union already imposes increased tariffs of up to 35.3% on Chinese EVs on top of the EU’s standard 10% car import tariff. The EU is reportedly considering a similar imposition on China\u2019s PHEVs. <\/p>\n \u201cJune\u2019s export data shows those measures have so far done very little to stem the tide, suggesting a bigger backlash may be in the works,\u201d Hamlin said. <\/p>\n AFS said Chinese manufacturers were also taking action to lessen the pressure for negative reaction.<\/p>\n \u201cTo keep the EU from cracking down on their growth (Chinese) automakers are looking to produce vehicles locally. Moving production to Europe will not help the over-capacity issue that exists in China but will avoid the tariffs applied to imported vehicles and help quiet the protectionist voices within the government and unions,\u201d AFS said in its July publication.<\/p>\n BMW CEO Oliver Zipse presents the new iX3 electric car at its official launch (Photo by Alexandra Beier\/Getty Images)<\/p>\n Getty Images<\/p>\n BYD is about to start production at a plant in Hungary and is believed ready to build a second one in either Turkey or Spain. Chery<\/a> will make Jaecoos and Omodas at a plant in Spain, and has an agreement to use part of Nissan\u2019s British factory to make EVs. Leapmotor is making some of its EVs at Stellantis\u2019s Spanish plants. Geely has agreed to take over about one-third of Ford\u2019s Valencia, Spain, plant. Xpeng is talking to Volkswagen<\/a> about using one of its four factories said to be under review for closure. Xpeng is a China affiliate of VW. <\/p>\n Don\u2019t expect IAA action until 2027<\/p>\n Despite this gathering storm, the IAA isn\u2019t expected to emerge as law until sometime next year. <\/p>\n Meanwhile, the European market for sedans and SUVs is being crippled by high energy costs and stagnant demand. Sales haven\u2019t yet recovered pre-Covid pandemic level\u2019s yet, and lag by almost 4 million a year. Major players are feeling the pressure and are warning shareholders that profits are being undermined. Volkswagen, Europe\u2019s biggest carmaker, recently proposed to cut 100,000 jobs and shut four factories in Germany.<\/p>\n","protected":false},"excerpt":{"rendered":"Euros notes on a European union flag background. getty It\u2019s no surprise that Chinese auto imports pose an…\n","protected":false},"author":2,"featured_media":438925,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[5174],"tags":[117563,1550,299369,254820,167454,50712,2000,299,299368,5187,1699,141158,299370],"class_list":["post-1096916","post","type-post","status-publish","format-standard","has-post-thumbnail","category-eu","tag-auto-forecast-solutions","tag-byd","tag-center-of-automototive-management","tag-chery","tag-china-threat","tag-co2","tag-eu","tag-europe","tag-europes-automakers","tag-european","tag-european-union","tag-iaa","tag-reuters-breaking-views"],"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/1096916","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=1096916"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/1096916\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/438925"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=1096916"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=1096916"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=1096916"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}