Chinese Automakers Surge in Europe Amid Contracting Market

The European automotive market experienced a contraction in June, with registrations falling 4.4% year-on-year to 1.25 million vehicles, according to data from Jato Dynamics. This decline reflects broader economic challenges and shifting consumer preferences within the region.

Chinese Automakers Make Inroads

Despite the overall market softness, Chinese automakers continued their upward trajectory, securing a record market share and putting pressure on established European brands. Their success stems from aggressive pricing strategies and a focus on electric vehicles, which resonate with environmentally conscious consumers.

The expansion of Chinese automakers into Europe challenges the traditional dominance of European and American brands. This has led to trade tensions between Brussels and Beijing, including disputes over EU tariffs on Chinese-made EVs aimed at safeguarding European producers.

Market Share Shifts

In the first half of 2025, Chinese brands nearly doubled their combined share of the European market to 5.1%, closing in on Mercedes-Benz's 5.2%. This surge is driven by brands like BYD, Jaecoo, Omoda, Leapmotor, and Xpeng. Notably, BYD registered 70,500 units in the first six months of 2025, a remarkable 311% jump from the previous year.

Among major automakers, Stellantis experienced the most significant market share decline, falling to 15.3% from 16.7% a year earlier. Notably, Tesla declined to 1.6% in the half-year period, compared to 2.4% last year. This indicates that European brands are facing increased competition from both established and emerging players.

Battery electric vehicle (BEV) registrations surpassed one million for the first time in the first half of 2025, with a 25% rise to 1.19 million units, representing 17.4% of the market. This trend underscores the growing consumer preference for sustainable transportation options.

As the automotive landscape evolves, Chinese automakers gain ground by adapting to changing consumer demands and leveraging technological advancements. The competition is intensifying as established players strive to maintain their market positions in the face of these new challenges.