Chinese Carmakers Grow Market Share in Europe With Hybrid Surge

In July, Chinese automakers reached an 11 percent share of new car sales in Europe, driven by consumers' demand for more affordable plug-in hybrids. According to Dataforce, a record one-third of plug-in hybrids registered that month were from Chinese brands like Chery Automobile’s Jaecoo. While Chinese plug-in hybrid models currently avoid tariffs, Germany’s Handelsblatt reports they could face duties in the future.

Analyst Julian Litzinger from Dataforce predicts Chinese brands will push cars into the market using attractive pricing, particularly targeting rental companies. Chinese automakers like BYD are appealing to European consumers with more budget-friendly models amid economic pressures. Earlier this month, Citi analysts suggested that three-quarters of Chinese sales in the EU come from MG owner Saic Motor, BYD, and Chery, companies known for offering lower-priced models.

Bloomberg Intelligence’s survey found that 38 percent of respondents had no issue purchasing a Chinese brand. European automakers are facing challenges from Chinese competitors, especially as profits in China shrink. Volkswagen is seeking to reduce costs, while Stellantis is allowing Chinese automakers to share its factories to address excess capacity.

Despite Brussels' lack of comment on potential hybrid tariffs, member countries are showing interest in such duties. German Finance Minister Lars Klingbeil emphasized the need to protect German industries from what he deemed "unfair competition."