Key facts
- Chinese electric car sales in Europe reached a record 14.2% market share in the first five months of the year.
- The UK is the largest European market for Chinese EVs due to lower tariffs.
- Italy saw a surge in sales driven by Leapmotor's heavily subsidized T03 model.
- Chinese manufacturers offer a wider variety of models in Europe than European brands.
- There is a potential shift by Chinese brands towards plug-in hybrids to avoid tariffs.
Chinese electric vehicle sales in Europe have surged to a record high, capturing 14.2% of the market in the first five months of the year, according to Schmidt Automotive Research. This increase, driven by strong demand in the UK and subsidized sales in Italy, intensifies pressure on European manufacturers who are already facing challenges from stricter emissions regulations.
Brands such as BYD, Chery, SAIC, and Xpeng are actively exporting to Europe, seeking to establish dominance in the global EV market. The growing market share of Chinese EVs comes despite EU tariffs of up to 35.3% on top of the standard 10% import duty. The UK, however, has not imposed these additional levies, making it the largest European market for Chinese cars, accounting for a quarter of sales in the 18 largest Western European markets.
Italy represented a fifth of the total sales, largely due to Leapmotor's strategy of importing thousands of its T03 electric cars to capitalize on government purchase subsidies, which at one point made the model as cheap as €5,000. Chinese manufacturers are offering a wider selection of models in Europe than their European counterparts.
Matthias Schmidt, founder of Schmidt research, suggests that the peak for pure electric vehicle market share may have been reached, with a potential shift towards plug-in hybrid electric vehicles (PHEVs). This is partly because PHEVs are not currently subject to the extra tariffs imposed only on BEVs, a loophole that may close within the next year. He anticipates that Chinese manufacturers will prioritize PHEVs to maximize this advantage.
Volkswagen CEO Oliver Blume has called for changes, stating that European PHEVs are uncompetitive against Chinese models. Reports indicate the EU is considering extending tariffs to PHEVs. The data also revealed a 60% year-on-year increase in Tesla's sales across Europe, with its Model Y being the best-selling individual model during the period.