EVs and Chinese brands change face of Europe’s car market

The rapidly changing face of the European automotive market is clear to see as new brands and new technologies massively increase their market shares.

The combined sales of new entrants from China outsold both Audi and Renault in August, according to data from JATO Dynamics.

There are now 40 different Chinese marques on sale in Europe, although MG, BYD, Jaecoo, Omoda and Leapmotor accounted for 84% of Chinese registrations. MG alone outsold both Fiat and Tesla in August.

This sudden transfer of sales poses severe challenges to established European OEMs and their supply chains. One in two companies in Germany’s medium-sized automotive sector now rate their current business situation as “bad” or “very bad”, according to the VDA (German Association of the Automotive Industry), a situation that jeopardises investment in machinery and IT. The VDA said 80% of companies intend to postpone, relocate, or cancel planned investments in Germany.

Europe’s largest new car market, Germany, reported new car registrations that were 30% lower for the first nine months of 2025 than the same period of 2019. But sales of cars with a plug are rising, with January to September battery-electric vehicle registrations up 32% and plug-in hybrid (PHEV) registrations up 85%, to account for almost one-in-three sales.

Driving zero emission vehicle sales depends on monetary and fiscal incentives, according to ACEA, which represents manufacturers in Europe.

Its new report argues that infrastructure expansion and wider model availability alone are insufficient to drive mass adoption. Poland doubled its BEV registrations following new support schemes, Slovenia saw an 89% increase, and a package of grants and tax exemptions pushed Portugal’s EV market share to over 21%.

While cost is clearly an issue for BEV buyers, the perception of BEVs as being responsible for inflationary total costs of ownership (TCO) is misguided, according to a study by the Arval Mobility Observatory. It found that the 30% increase in the TCO of cars between 2020 and 2025 was due to macroeconomic factors, such as rising new vehicle prices, higher interest rates and more expensive service and maintenance.

European markets are gearing up for a substantial expansion of the zero emission parc. Vendor finance company DLL has completed its new joint venture with Iveco Group, the commercial vehicle manufacturer. The partnership centres on GATE, Iveco Group’s rental platform for low- to zero-emission commercial vehicles, which is already operational in Italy, France and Germany.

Funders are also focusing on the residual values of end-of-contract electric vehicles. Both Arval and Ayvens Carmarket, for example, have introduced State of Health certificates for its used BEVs across Europe to address buyer concerns about battery degradation. Since the battery is the most valuable part of an EV, its condition is a decisive factor in resale values, so boosting transparency and buyer confidence should enhance residual values.