Europe's major automakers unveiled new electric vehicles at the IAA Mobility conference in Munich this week. The show runs from September 9 to September 14, 2025. According to CNBC, Volkswagen revealed the ID.Cross Concept car with advanced software features. BMW introduced the iX3 sports utility vehicle featuring its "superbrain architecture" technology. The system replaces traditional hardware with a centralized computer platform.

Chinese manufacturers BYD and Xpeng also presented new models at the European trade show. Xpeng unveiled the Next P7 sedan with 585 horsepower and 512 lb-ft of torque. The vehicle claims a 0-to-62 mph sprint time of 3.7 seconds. BYD and other Chinese brands expanded their European lineups with both electric and hybrid options. The Munich show features 40% more Chinese exhibitors compared to 2023.

Why European Automakers Are Responding Now

Chinese car brands nearly doubled their European market share in 2025. JATO Dynamics reports Chinese automaker sales reached 5.1% market share in the first half of 2025. This represents a 91% increase from the same period in 2024. Chinese brands now outsell Ford at 3.8% and trail Mercedes-Benz by just 0.1 percentage point.

BYD's European registrations surged 311% in the first six months of 2025 to 70,500 units. The Chinese company outsold Tesla in Europe for the first time in April 2025. MG, owned by SAIC Motor, increased volumes by 22% to 162,153 units. Tesla's European sales declined 33% to 109,264 units over the same period. High prices remain a barrier to broader EV adoption across Europe. Automakers race to introduce models priced under 25,000 euros.

Industry Transformation Accelerates

The competitive shift affects traditional market dynamics across Europe's automotive sector. U.S. News notes Chinese brands could eventually match Japanese and Korean automaker market shares. Japanese brands currently hold 14% of European sales while Korean brands account for 9%. McKinsey estimates Chinese manufacturers may reach similar levels in coming years.

European automakers face multiple challenges beyond Chinese competition. Volkswagen CEO Oliver Blume told reporters that U.S. tariffs cost his company several billion euros in 2025. German and European manufacturers also report declining sales in China, their largest single market. BMW CEO Oliver Zipse called the EU's 2035 fossil fuel car ban a "big mistake" during the show. Industry executives lobby for emissions regulations covering entire supply chains instead.

EU tariffs on Chinese-made EVs have not stopped the expansion. AlixPartners consultant Xing Zhou said tariffs will not deter Chinese manufacturers from European markets. Chinese companies respond by localizing production and expanding hybrid vehicle offerings. BYD plans to manufacture EVs for European sales within three years. This strategy helps avoid import duties while maintaining competitive pricing.

Further Reading

For deeper insights into global adoption trends, our Alternative Financial Systems Index tracks regulatory frameworks and adoption metrics across 50 countries. The index provides data on how financial innovation reshapes traditional markets worldwide.