Chinese Car Brands Achieve Historic Breakthroughs in European Market

Chinese automotive brands are penetrating the European market at an unprecedented rate, marking a historic breakthrough. According to a survey by global automotive industry data and consulting service provider JATO Dynamics covering 28 European countries, new car registrations in Europe reached 1,107,517 units in May 2025, a 2.5% increase year-on-year. Among these, new car registrations from Chinese manufacturers totaled 65,808 units, a remarkable 111% increase, raising their market share to 5.9%, doubling from 2.9% in the same period of 2024. A report by investment bank UBS also revealed that in May 2025, the market share of Chinese brands across all new car registrations—including fuel cars, electric vehicles, hybrid vehicles, and plug-in hybrids—in the five major European markets (Germany, France, the UK, Spain, and Italy) reached 6%. In the electric vehicle sector alone, Chinese brands saw their market share rise to 11%, becoming a significant force driving the electrification process in Europe. JATO Dynamics global analyst Felipe Munoz stated, 'Despite the EU imposing tariffs on Chinese electric vehicles, Chinese brands continue to experience strong growth in Europe.' Part of this success can be attributed to the comprehensive deployment of alternative power systems, such as plug-in hybrids and hybrids, by Chinese automakers. The best-selling car manufacturers' rankings reflect this shift in dynamics. European giants like the Volkswagen Group, Renault Group, and BMW still hold dominant positions and continue to grow, with sales increases of 3.3%, 4.6%, and 6.3%, respectively. However, Chinese brands Geely and SAIC have entered the top ten list, with registration numbers of 32,992 and 29,387 units, respectively, securing the 9th and 10th positions. Additionally, BYD's registration numbers surged by 397%, and in April, BYD's sales in Europe surpassed Tesla for the first time. In May, they narrowly missed the top spot by just 50 units, showcasing their strong competitiveness. Chery's sub-brand Jaecoo registered 7,449 units, outperforming traditional Japanese brand Honda, while another sub-brand, Omoda, achieved 4,213 registrations, surpassing Japanese brand Mitsubishi. Recently gaining momentum in domestic sales, Leap Motor registered 1,723 units in Europe, marking their initial presence in the market. Among the best-selling models, the MG ZS ranked 15th. In the list of best-selling electric vehicle brands, BYD secured the 12th position with 7,111 registrations, representing a 158% year-on-year increase. SAIC's MG registered 4,114 units, placing 17th, while XPeng and Leap Motor placed 24th and 25th with 1,583 and 1,316 registrations, respectively. However, no Chinese brand has yet made it into the top 25 best-selling pure electric models, with the Tesla Model Y still holding the top position, indicating that there is still room for improvement for Chinese brands in developing 'hit' models in Europe. The rapid expansion of Chinese brands in Europe raises attention to the underlying business logic. UBS analysis indicates that this high growth trend is expected to continue, driven by Chinese manufacturers' cost advantages forged in the fiercely competitive domestic market. They are more inclined to export higher-margin vehicles to Europe. A Reuters survey of BYD's product pricing released by dealers in Germany, Brazil, Australia, and Thailand found that BYD's compact SUV ATTO3 (Yuan PLUS) is priced 81% to 174% higher overseas than in China, while the Dolphin hatchback's overseas price is 39% to 178% higher, and the high-performance sedan Sea Lion's price is 30% to 134% higher. This significant price difference provides brands with a buffer to address tariffs, invest in marketing, and establish service networks. Furthermore, negotiations between China and the EU regarding electric vehicle tariffs are ongoing, with hopes of replacing current tariffs with a 'minimum pricing' mechanism in the future, granting Chinese brands greater pricing power to strategically lower prices in the European market, effectively absorbing or offsetting the impact of EU-imposed tariffs. At the same time, Chinese brands are expanding their product offerings in Europe, moving beyond pure electric vehicles into the still large hybrid (PHEV/HEV) and even fuel vehicle markets. This diversification strategy helps reach a broader consumer base and reduces reliance on a single power type. However, the efficiency and profitability advantages of Chinese automotive brands inevitably raise concerns and backlash within the European automotive industry. Under industry pressure, forces seeking to change the EU's stringent emission rules are taking action. The European Commission has decided to reassess the 2035 'zero carbon emissions' target for new vehicles in the second half of 2025, potentially allowing for technology-neutral solutions (i.e., retaining carbon-neutral fuel vehicles) instead of enforcing full electrification. This could break the established path of mandatory full electrification, allowing time for traditional European automakers to transition. Meanwhile, European giants like Volkswagen and Renault are accelerating the development of competitively priced electric vehicles aimed at the mass consumer market to directly counter the core advantages of Chinese brands. The competition for 'affordable electric vehicles' will become the main theme in the European market in the coming years.