Sales of Chinese sedans and SUVs in Europe will peak at a market share of between 12 and 15% between 2030 and 2035, which may well be a relief to European manufacturers currently reeling from the current pace of competition.
Chinese automakers are planning to build factories across Europe to avoid electric vehicle tariffs. A change to a minimum pricing agreement with the European Union rather than tariffs on EVs isn’t likely to slow this trend.
According to a report from Berenberg Bank of Germany, Chinese manufacturers accounted for less than 1% of the European market in 2021. This accelerated to about 6.6% last year and could reach 11 to 12% by 2028.
Berenberg Bank’s 12 to 15% estimate between 2030 and 2035 is at the high end, although investment bank UBS calls for at least a 15% market share to be achieved by Chinese in 2030. These sales will be driven mainly by electric vehicles, but Chinese manufacturers are still producing a wide of options including hybrids, plug-in hybrids and internal combustion engines.
Berenberg Bank said the Chinese expansion so far has come mainly at the expense of European carmakers, rather than the Japanese or Korean. European market share has declined from about 71% in 2021 to 66.5% in 2025. The bank said the biggest loser so far has been multi-brand Stellantis.
Largely ICE dominated
“European (manufacturers) have held relatively well in the small car segment, with Chinese (manufacturers) gaining market share at the expense of other Asian and U.S. brands. This segment remains largely ICE dominated,” the bank said.
The rapid market share gains by the Chinese has been helped in large part by a lack of competitive European EVs.
“In Europe, “affordable” EV options priced at or below €25,000 ($29,300) and offering increasingly competitive embedded technologies like acceptable range and charging speeds have now gradually been rolled out, which helps explain the improving EV momentum across most European legacy (manufacturers),” according to the bank.
Chinese expansion could have been even more impressive, but the EV component has been restrained by the imposition of increased tariffs by the European Union. The EU imposed tariffs of up to 35.3% on Chinese EVs in October 2024, on top of the existing 10% import duty, following an investigation into unfair Chinese state subsidies. These duties vary by manufacturer, with SAIC facing 35.3%, Geely 18.8%, and BYD 17%.
This tariff agreement might soon be replaced by a minimum pricing agreement. Details need to be agreed but will depend on volume and investment commitment in the EU.
UBS said this is not an imminent game-changer.
Stellantis, Renault, VW under pressure
“The EU’s decision is likely to add pressure on the EU mass market (manufacturers) Stellantis, Renault and Volkswagen and also other Asian importers. 2026 will be a year of expanded export efforts by the Chinese because of elevated competition and slowing volumes in their domestic market,” UBS said in a report.
UBS said the latest volume gains by the Chinese in Europe have been driven by plug-in hybrids, which are out of the scope of the new proposed agreement. Minimum pricing would still favor Chinese profits, according to UBS.
“In the longer term, we still expect localisation of Chinese players in the EU,” UBS said. Plans for Chinese auto factories in Europe are developing at pace. BYD is building an EV plant in Hungary, set to begin production imminently. A second plant in Turkey will open in the spring, and reports say a factory in Spain is possible. Great Wall Motor is evaluating sites in Spain and Hungary. Chery Automobile is assembling vehicles in Spain. Changan and SAIC Motor are evaluating sites. Xpeng may team up with Magna Steyr in Austria for vehicle production while seeking to build its own dedicated European facility.
Chinese manufacturers hampered by lack of dealerships
Chinese market share increases might be hampered by a more restrictive EU regulatory framework, the rollout of new, more competitive EV platforms from incumbent manufacturers, and the lack of established dealerships and maintenance infrastructure.
“That said, while we expect Chinese market share gains to normalize in the coming years, they are likely to maintain sustained technological and pricing pressure, particularly in the mid-size segment. This segment remains the largest and most strategically important profit pool in Europe for Stellantis, Volkswagen and Renault, implying continued price pressure despite likely lower headline market share downside trends,” the bank said.
Source: Forbes