Chinese automakers strengthen their presence in the European EV market, overcoming tariff barriers to expand market share

The latest data from November clearly shows an expanding share in Europe. According to Dataforce statistics, Chinese automotive brands hold 12.8% of the electric vehicle market across the EU, EFTA countries, and the UK. Furthermore, they have achieved over 13% market share in the plug-in hybrid segment.

What is driving this rapid penetration? The primary reason is excess production capacity within China. A strategic shift by Chinese manufacturers seeking new markets beyond their highly competitive domestic market has become the driving force behind their expansion into Europe. While BYD and SAIC Motor are leading the charge, emerging players like Chery Automobile and Zhejiang Leapmotor are also rapidly entering the market, reshaping the landscape of the European automotive industry.

Explosive Growth of Emerging Brands Shakes the Market

Industry dynamics are changing significantly. Leapmotor’s electric vehicle sales in Europe surged over 4,000% through October. This growth is partly attributed to expanded distribution networks through partnerships with Stellantis. Meanwhile, Chery’s Omoda brand also achieved an 1,100% increase in electric vehicle sales during the same period, rapidly increasing competitive pressure on traditional European manufacturers.

BYD’s European Strategy: Long-term Deployment through Local Manufacturing

As a leader in China’s automotive industry, BYD is not just entering the market but investing heavily in establishing a full-scale manufacturing presence in Europe. According to Stella Li, Executive Vice President, the new European factory under construction in Hungary is expected to complete machinery installation by the end of the year. After beginning trial operations in Q1 2026, full-scale production will commence in Q2.

This is not the only target. BYD is also building new factories in Brazil and Turkey. Since August, shipments from its operational factory in Thailand have already started heading to Europe. Li acknowledges that initial manufacturing costs in Hungary will be higher than in China but emphasizes that local manufacturing is essential for building a reliable brand. He expects cost competitiveness to improve over time and plans to maintain flexibility to respond to tariff policy changes.

Simultaneously, they are exploring additional factory sites, including Spain. Li states, “First expanding the Hungary facility, then Brazil, and subsequently Turkey,” outlining a scenario for building a global manufacturing network.

CEO Wang Chuanfu is dispatching R&D leaders to Europe, Latin America, and the Middle East to develop vehicles tailored to each region’s market needs.

Market Performance Validates Strategic Effectiveness

Results of BYD’s expansion in Europe are evident in the numbers. In October, the brand achieved more than four times the registrations of Tesla in the German market. In the UK, performance was about seven times higher, supported by government statistics confirming this advantage.

EU Tariff Avoidance and Diversification Strategies

Since the latter half of 2024, Chinese manufacturers have adopted tactics to minimize the impact of EU tariffs. By shifting focus to hybrid vehicles and expanding sales in non-EU markets (such as the UK), they are maintaining market share while absorbing tariff burdens through flexible strategies.

Traditional European Automakers Seek to Regain Ground

Established automotive powers are beginning to respond. They are lobbying for relaxed regulations on internal combustion engine vehicle bans and urging authorities to reconsider the planned prohibition of new gasoline vehicle sales by 2035. This reflects an ongoing effort to protect Europe’s largest industrial base amid rapid industry transformation.

The growing presence of Chinese automakers in the European market symbolizes a reshaping of the global automotive industry and will be a key factor influencing future industry trends.