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China\u2019s plan to capture a big share of Europe\u2019s electric vehicle market now includes much local manufacturing but the likes of BMW, Mercedes, Stellantis and Volkswagen are retaliating with a host of new model launches, according to a report. <\/p>\n
Investment bank UBS said the IAA Mobility 2025<\/a> motor show in Munich which closed September 14 showed how ambitious China\u2019s plans are for Europe. UBS said more than a dozen Chinese brands attended, and over 50 Chinese suppliers were there.<\/p>\n The report, from BMI<\/a>, a subsidiary of Fitch Solutions, said Europe might be outgunned in the price war, but heritage and brand image can be a more powerful weapon. <\/p>\n Price might not be too important if the choice is between BMW, Mercedes, Audi and Porsche versus say Xpeng, Dongfeng, Chery or BYD. Even Volkswagen, Renault, Peugeot and Fiat might have more resonance with buyers in Western Europe than Jaecoo, Omoda, or Leapmotor, although a 30% price advantage might be crucial in favor of the Chinese. <\/p>\n Chinese EVs also lack the extended high-performance cruising ability to meet the 80 mph+ all-day cruising ability<\/a> needed on Europe\u2019s impressive autoroute network. <\/p>\n \u201cChina\u2019s role in Europe\u2019s autos industry is shifting from export-led growth to local manufacturing, with electric vehicle-related capacity already being built in the EU, coming online and scaling up, a trend reinforced by the EU\u2019s tariffs on Chinese EVs introduced in 2024,\u201d the report said.<\/p>\n \u201cWe contend that an extensive model launch planned for 2026-2027 by European manufacturers across internal combustion engine and EV powertrains will prove crucial to defending home-market share against intensifying competition from Chinese brands,\u201d it said. <\/p>\n ‘BYD Hefei,” vehicles for export to Zeebrugge Port in Belgium in Suzhou, China. (Photo by Costfoto\/NurPhoto via Getty Images)<\/p>\n NurPhoto via Getty Images<\/p>\n \u201cWe also expect entrenched loyalty to heritage European brands among local buyers will constrain many Chinese brands\u2019 ability to gain traction, particularly in Western Europe,\u201d according to the report.<\/p>\n China\u2019s Europe share almost doubles<\/p>\n Automotive consultants JATO Dynamics has said in the first half of 2025<\/a> the market share of Chinese brands in Europe almost doubled to 5.1%, compared with the same period of 2024, driven by BYD, Jaecoo, Omoda, Leapmotor and Xpeng. Many of these sales were EVs with some plug-in hybrids and combustion vehicles.<\/p>\n Dr Michael Putz, managing partner at Automodicted Consulting, recently told Forbes Chinese automakers have big ambitions for Germany, with a 10% market share a credible target.<\/p>\n In its report, BMI said EV and plug-in hybrid sales in Europe will rise to 5.0 million in 2027 from 3.1 million in 2024, raising market share to 30% from 19.4%. This will be propelled as well by new affordable EVs from Volkswagen, VW\u2019s Skoda subsidiary, Renault, and Stellantis\u2019s Peugeot and Fiat. Attracted by the burgeoning market, and the imposition of EV tariffs by the EU, several Chinese manufacturers have announced plans to build cars in Europe. BYD has plants in Hungary and Turkey, Chery is making its Omoda and Jaecoo brands in Barcelona, Spain. Stellantis affiliate Leapmotor is building vehicles in Spain, after starting assembly in Poland. <\/p>\n Chinese manufacturers, facing intense competition at home, are being forced to find new markets overseas. With the U.S. effectively blocked by 100% tariffs, wealthy Europe, or at least the Western bit, is a juicy target.<\/p>\n China has become the world\u2019s biggest car market, but all is not well on the home market. <\/p>\n China\u2019s home market in a mess<\/p>\n In a Special Report<\/a> entitled \u201cChina is sending its world-beating auto industry into a tailspin\u201d, Reuters said government forced production targets with no reference to demand have created a saturated market. Last year, Chinese automakers had the capacity to make twice the 27.5 million cars they made. Reuters quotes consultants AlixPartners saying by 2030 only 15 of the 129 EV and hybrid makers will be financially viable.<\/p>\n The Chinese electric car OMODA & JAECOO brand concept presents its models at IAA Mobility in Munich. (Photo by EyesWideOpen\/Getty Images)<\/p>\n Getty Images<\/p>\n The plans to make lots more vehicles in Europe won\u2019t please the authorities in China.<\/p>\n