Chinese Automakers Expand in Europe with Hybrid and EV Lineups

Chinese automakers are preparing to showcase new hybrid and electric vehicles at the Munich auto show, aiming to expand their presence in Europe. BYD, Xpeng, and Leapmotor Technology are among the companies presenting new models. Despite trade tensions and tariffs, Chinese EVs captured 9.9% of the European market in July, with hybrids reaching a record 9.7% share. Chinese automakers are capitalizing on the region's shift towards EVs and hybrids, challenging European brands like Volkswagen and Stellantis.

Chinese automakers are preparing to showcase new hybrid and electric vehicles (EVs) at the Munich auto show, aiming to expand their presence in Europe. BYD, Xpeng, and Leapmotor Technology are among the companies presenting new models. Despite trade tensions and tariffs, Chinese EVs captured 9.9% of the European market in July, with hybrids reaching a record 9.7% share [1]. Chinese automakers are capitalizing on the region's shift towards EVs and hybrids, challenging European brands like Volkswagen and Stellantis.

The Munich show is taking place as trade tensions linger with Beijing following the European Union's decision last year to impose tariffs on EVs imported from China. Chinese automakers have kept growing anyway, adding more hybrid and combustion models that don’t trigger the duties, forming local sales partnerships, and committing to transfer some production to the region. They’re challenging the likes of Volkswagen AG and Stellantis NV, which are cutting costs to defend margins in a stagnant European auto market [1].

BYD is among manufacturers leading the push. The company is now regularly outselling Tesla Inc. in Europe and is setting up factories in Hungary and Turkey to avoid the EU tariffs. Fresh off its first shipments to Europe from Thailand, BYD will unveil its Seal 06 DM-i Touring station wagon in Munich, part of its push to bring more plug-in hybrids to the region [1].

Xpeng plans to bring a revamped version of its electric P7 sedan to the show in Germany, expected to have faster charging and more range, while Stellantis partner Leapmotor will introduce its B05, an electric hatchback to compete with Volkswagen’s ID.3 [1].

The tariffs have also spurred collaboration, as Chinese manufacturers navigate the new rules and European firms link up with Chinese rivals to stay abreast in areas like software and battery technology. Stellantis reportedly plans to build EVs with Leapmotor in Zaragoza, Spain, near a joint battery plant it will set up with China’s Contemporary Amperex Technology Co. Xpeng, which cooperates with Volkswagen in China, competes with the German manufacturer on its home turf [1].

China’s Munich contingent will also include dozens of suppliers, demonstrating the breadth of the country’s automotive ecosystem. CATL will show off its latest battery technology, while sensor maker Hesai as well as autonomous-driving startups DeepRoute.ai and Momenta — which is working with Uber on a robotaxi service for Europe — are also making the trip to Germany. Geely-backed Polestar is unveiling the Polestar 5, a high-powered electric grand tourer with an aluminum chassis that’s glued together rather than welded to optimize performance. At the more budget end, Chery Automobile Co. plans to introduce its Omoda and Jaecoo brands in Germany, and will show off EVs and plug-ins including the Omoda 5 and Jaecoo 7 [1].

While Chinese automakers are making significant inroads in Europe, they are also facing challenges at home. Xpeng Inc. reported year-to-date deliveries of 271,615 units on Monday, more than three times the same number of cars it sold the first eight months of 2024. A key reason is the launch last August of its MONA M03 model, which starts from just 119,800 yuan ($16,800) [3]. The entry-level EV competes with mass-market models from BYD and Geely Automobile Holdings Ltd. but leverages Xpeng’s highly regarded intelligent technologies. It’s quickly become a bestseller, accounting for about 40% of Xpeng’s monthly sales. That’s translating directly into financial improvements for Xpeng. The carmaker’s net loss narrowed in the second quarter while gross margins expanded to 17.3%. During an earnings call last month, Chairman and CEO He Xiaopeng said the EV maker expects monthly deliveries to consistently exceed 40,000 units starting in September [3].

BYD, however, is facing a rough patch atop China’s market for new-energy vehicles. As more boutique brands gain momentum, BYD looks in danger of missing its own target for 5.5 million shipments this year. Sanford C. Bernstein now expects that number to be more like 5.1 million [3].

In contrast, Stellantis faces a 2025 recall crisis involving 1.4 million vehicles, costing billions and driving a 48% stock price drop amid battery, software, and airbag defects. The automaker’s EV transition struggles against rivals like Tesla, relying on dealership recalls instead of OTA updates while posting €3 billion in negative free cash flow. Leadership changes and a "people-first" strategy under new CEO Antonio Filosa aim to stabilize operations, but 25% North American shipment declines highlight ongoing risks [4].

References:
[1] https://www.bloomberg.com/news/articles/2025-09-01/chinese-hybrids-evs-storm-munich-in-latest-european-push
[2] https://news.bloomberglaw.com/international-trade/chinese-hybrids-evs-storm-munich-in-latest-european-push
[3] https://www.bloomberg.com/news/articles/2025-09-01/xpeng-smaller-ev-makers-kick-sales-goals-in-china-as-byd-stalls
[4] https://www.ainvest.com/news/stellantis-recall-crisis-looming-threat-investor-confidence-long-term-viability-2508/