Chinese marques in driving seat as high petrol prices accelerate EU shift to electric cars

Chinese carmakers are experiencing significant growth in the European electric vehicle market, particularly in plug-in hybrid electric vehicles (PHEVs). This surge coincides with record-high petrol prices across the EU, driving increased demand for battery-powered cars. In August, battery-electric vehicle registrations rose 62.7% year-on-year, reaching 21.7% of new registrations in the first eight months. Chinese brands, including BYD and Chery, accounted for approximately 92% of the net increase in the EU market in August. Chinese manufacturers have doubled down on the PHEV segment, where they now hold a 35.3% market share, despite EU anti-subsidy duties on battery-electric cars. PHEV demand is particularly strong in Italy, Spain, and Germany.

Sales of Chinese hybrid cars in the EU have surged dramatically, rising from 659 fully hybrid cars sold in 2022 to over 160,000 in the first seven months of this year. This growth follows the EU's imposition of tariffs on Chinese electric vehicles in 2024, leading to a significant increase in plug-in hybrid imports as well. Concerns are mounting in Brussels over the impact on European carmakers, with the EU now urging China to voluntarily reduce hybrid exports or face potential quotas. Chinese manufacturers like BYD and Geely are making substantial gains in the EU market, with their sales surpassing Tesla's in the bloc. This trend contributes to a widening trade deficit between the EU and China, prompting upcoming high-level discussions to address the situation.