Chinese cars are making big gains in the European market. After the European Union (EU) imposed high tariffs on Chinese electric vehicles, China has been targeting the market with hybrids and other models at the forefront. Hyundai Motor and Kia are losing market share in Europe under pressure from Chinese corporations.
According to the U.K. auto market research firm JATO Dynamics on the 15th, Chinese carmakers sold a total of 347,135 vehicles in 28 European countries in the first half of this year. That is a 91% increase from 181,897 units in the first half of last year. Over the same period, the Chinese brands' market share nearly doubled from 2.7% to 5.1%.
JATO Dynamics said five Chinese automobile corporations—BYD, Xpeng, Leapmotor, Omoda, and Jaecoo—are leading growth in the European market. Omoda and Jaecoo are sub-brands under Chery Automobile, one of China's five largest carmakers. Among them, BYD sold 70,500 vehicles in Europe in the first half, up 311% from a year earlier.
The surge in sales of Chinese cars in Europe is drawing attention because it came despite high tariff barriers. The EU has imposed additional countervailing tariffs on Chinese-made electric vehicles since October last year. The reason for the tariffs was that Chinese-made EVs, whose prices were significantly lowered by China's unfair subsidies, were disrupting the European market. The tariff rate applied to Chinese EVs had been 10%, but this measure raised tariffs to 17.8%–45.8%.
With high tariffs attached to EVs, Chinese carmakers are attacking the European market by focusing on hybrid models. Additional countervailing tariffs do not apply to hybrids.
BYD's mid-size hybrid sports utility vehicle (SUV), the Seal U, ranked third in sales among all plug-in hybrid models in Europe in the first half of this year. Jaecoo's small crossover SUV, the Jaecoo 7, ranked ninth in European plug-in hybrid sales in June.
By contrast, Hyundai Motor and Kia are seeing declining sales in Europe. In the first half, the combined sales of Hyundai Motor and Kia reached 631,027 units. While their total sales outpaced Chinese brands, they fell 4.1% from the same period last year.
Their recent market share is also retreating. Last month, Hyundai Motor and Kia's market share in Europe was 8.5%, down 0.7 percentage points (P) from a year earlier. In particular, Kia's sales last month were 42,671 units, down 8.5% from the same period last year, and its market share also fell by 0.7 percentage points.
An official in the finished-vehicle industry said, "Hyundai Motor and Kia improved sales performance in the pure EV market, but struggled in the plug-in hybrid market against Chinese companies." Hyundai Motor sells two plug-in hybrid models in Europe—the Tucson and Santa Fe—while Kia sells four: the Ceed, Niro, Sportage, and Sorento.
The industry expects the offensive by Chinese cars in Europe to intensify. Once the plants that Chinese companies are building in Europe begin operations, pure EVs will also be able to avoid high tariffs.
BYD, the world's largest EV manufacturer, is currently building factories in Hungary and Türkiye. Leapmotor and Shanghai Automotive Industry Corporation are reportedly pursuing plans to build plants in Spain. Chery Automobile formed a joint venture with Spanish automaker Ebro to build a factory in Barcelona and has already begun mass production.
Stella Li, BYD vice chair, said at "IAA Mobility 2025" in Munich, Germany, on the 9th (local time), "The Hungary plant will begin mass production this year and will debut the Dolphin Surf, a small EV, as its first model." She added, "Within six months we will produce three to five plug-in hybrid models, and we plan to launch more eco-friendly cars through the Türkiye plant, which will start operations next year."