EV shocker: European demand for Chinese electric vehicle brands is stronger than anticipated

Chinese electric vehicle manufacturers are surprising many auto industry insiders by making notable gains in the European automotive market, despite efforts by European leaders to resist what they have labeled as a flood of cheap Chinese EVs.

In the first half of 2025, Chinese brands accounted for 5.1% of new vehicle registrations across 28 European countries, nearly doubling their share from the previous year and reaching parity with Mercedes-Benz (OTCPK:MBGAF). Key brands driving the surge included BYD (OTCPK:BYDDF) (OTCPK:BYDDY), Leapmotor, Xpeng (NYSE:XPEV), Jaecoo, Omoda, and Great Wall Motor (OTCPK:GWLLF) (OTCPK:GWLLY), according to data. In particular, BYD (OTCPK:BYDDF) has turned heads by registering 70,500 cars in the first half of 2025 to rank among the continent’s top 25 auto brands.

The new popularity of Chinese brands reflects dramatic changes in perceptions, according to Nikkei Asian Review. While a decade ago Chinese cars were seen as inferior or unsafe, in the current market they are winning top marks in major Swedish auto publications, and companies like XPeng (NYSE:XPEV), Nio (NYSE:NIO), and Geely’s Zeekr Automotive (NYSE:ZK) and Polestar (PSNY) have flagship locations in Stockholm. In Norway, Chinese electric vehicles now claim around 10% of the market, and in Denmark, market share has climbed to 5.5%. Even in Switzerland, traditionally dominated by German luxury brands, Chinese EVs are gaining an impressive foothold.

Analysts noted that Chinese EVs have done better than expected in Europe due to a combination of aggressive pricing, rapid product innovation, and state-backed industrial policies that support battery and electronics supply chains.

While recent surveys indicate that a substantial number of European consumers are open to Chinese EVs, some concerns about quality and unfamiliarity with the brands still persist. The general expectation is that Chinese brands will solidify their presence in lower-priced vehicle segments, while European brands are likely to remain dominant in luxury and premium categories.

While Chinese EV brands have made progress in Europe, Tesla’s (NASDAQ:TSLA) new registrations across Europe declined by over 33% in the first half of 2025, falling from more than 102,000 units in the first half of 2024 to just 68,801 in the first half of 2025. In the European Union alone, Tesla sold 70,655 vehicles in the first half, a year-over-year decline of 44%. Ford (F) and General Motors (GM) have also been impacted by the aggressive moves by Chinese EV sellers in Europe.