Europe's car industry hit by Chinese EVs

Chinese carmakers are gaining ground in Europe on price, speed and product mix. JATO Dynamics said Chinese automakers registered 65,808 vehicles in 28 European markets in May 2025, equal to 5.9% of total sales, up from 2.9% a year earlier. ACEA said cars made in China accounted for 7% of EU sales in 2025, while Chinese-made battery-electric cars had already lifted their share of EU battery-electric sales from about 3% to more than 20% over the previous three years. The pressure matters because autos remain one of Europe’s industrial anchors. ACEA says motor vehicle manufacturing directly employed 2.4 million people in the EU in 2022, supported 13.2 million jobs across manufacturing, services and construction, and generated €72.8 billion of R&D spending in 2022. (jato.com) ### Why are Chinese brands winning buyers in Europe? JATO analyst Felipe Munoz said Chinese brands kept growing in Europe despite EU tariffs on Chinese electric vehicles. (acea.auto) He said their momentum was driven in part by pushing “alternative powertrains, such as plug-in hybrids and full hybrids,” not only pure battery EVs. May 2025 data showed how broad that push had become. (acea.auto) MG registered 29,400 vehicles that month, up 30% year on year, and BYD’s registrations jumped 397%, according to JATO. Jaecoo outsold Honda in the month, and Omoda outsold Mitsubishi. April 2026 data cited by Bloomberg from Dataforce showed Chinese automakers accounted for more than 15% of Europe’s electric-vehicle sales for the first time, with 38,281 EVs sold. (jato.com) Bloomberg said Chinese brands were also closing in on 10% of the broader European car market. ### Why is this more than a cheap-car story? Huawei and JAC took that competition upmarket with the Maextro S800. (jato.com) Bloomberg reported on May 30, 2025 that the top version was priced at 1.02 million yuan, or about $141,637, as Huawei and its partners pushed deeper into China’s luxury-car segment. The New York Times reported on May 25, 2026 that Chinese consumers were increasingly buying domestic luxury brands, including the Maextro S800, as homegrown makers challenged established European names. (bloomberg.com) That matters for Europe because premium vehicles have long carried the margins and brand prestige of German and other European manufacturers. The Maextro example shows Chinese groups are not staying in entry-level segments. (bloomberg.com) Bloomberg described the S800 as aimed at top-end models from Mercedes-Benz and Bentley. ### What does Europe’s own industry data show? (nytimes.com) ACEA said EU car production reached 11.5 million units in 2024 after a decline, and the industry group said high energy costs and tariffs were weighing on Europe’s manufacturing base. Its 2025-26 Pocket Guide also said the automotive sector invested €85 billion in research and development in 2023, more than any other private sector in Europe. (bloomberg.com) The same ACEA report said EU car exports fell 6.2% in 2025 and the sector’s trade surplus narrowed to €76 billion. It also said sales of EU-made cars in China continued to decline amid intensifying local competition. ### Is China’s domestic price war easing? DigiTimes reported in April 2026 that China’s auto market was showing a shift, but that the price war had not ended. (acea.auto) The outlet said weakening domestic demand and intense competition were still squeezing the market. That does not remove the pressure on Europe. If Chinese manufacturers can sustain export growth while moving into hybrids, luxury cars and higher-priced models, European incumbents face competition in both mass-market and premium segments. (acea.auto) That is an inference from the market-share data, ACEA trade figures and the Maextro launch. May 2026 sales releases from JATO, Dataforce and ACEA will show whether Chinese brands keep extending those gains in Europe through the second quarter. (digitimes.com) (jato.com)