Chinese carmakers gear up for Munich show as EV competition heats up at home

China’s carmakers are readying a new crop of hybrid and electric vehicles (EVs) for Europe, using next week’s Munich car show to kick off the next phase of their expansion in the region.

BYD, Xpeng and Zhejiang Leapmotor Technology are among manufacturers showing off new models at the IAA Mobility 2025 expo, moving to broaden their lineups and extend gains made in recent years. Their push into Europe is intensifying as an EV price war rages at home, while the lucrative US market is practically closed due to trade hurdles.

The latest figures from researcher Dataforce show continued strength in Europe for Chinese EVs in July, while hybrid sales reached a record 9.7 per cent share.

EVs and hybrids are growing in importance as Europe moves to phase out sales of new combustion-powered cars over the next decade. Chinese brands captured 9.9 per cent of the region’s EV sales in July, after June’s even stronger showing. They took 5.3 per cent of the overall car market, the third straight month above 5 per cent, according to Dataforce.

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 carmakers have kept growing anyway, adding more hybrid and combustion models that do not trigger the duties, forming local sales partnerships and committing to transfer some production to the region. They are challenging the likes of Volkswagen and Stellantis, which are cutting costs to defend margins in a stagnant European car market.

Chinese players have done especially well in the fast-growing hybrid categories, said Julian Litzinger, an analyst with Dataforce. “The rise does not seem to be over,” he said. With Chinese firms adding more hybrid models, “there is growth potential left”.