BYD and other Chinese automakers have doubled their share of the European car market following the European Union's imposition of higher tariffs on electric vehicles from China. Initially perceived as a setback for these companies, the tariffs prompted them to pivot towards hybrid and gasoline-powered vehicles that are exempt from such duties.
Chinese manufacturers began importing more affordable car models and focused on markets like Italy and Spain, where competition from German and French automakers is weaker. Despite tariffs that can reach up to 35 percent for certain brands, Chinese companies increased their market share from 2.4 percent to 4.9 percent in April compared to the previous year, according to data from JATO Dynamics.
Pier Giacomo Cappella, managing director of a dealership chain in Italy, highlighted the rapid design and production capabilities of Chinese automakers, noting that they can develop new models in as little as six months, whereas German manufacturers typically take at least two years.
In April, sales of BYD electric vehicles in Europe slightly outpaced those of Tesla, with 7,231 registrations compared to Tesla's 7,165. The overall electric vehicle market in Europe is growing rapidly, with approximately one in five sold in the first quarter being made in China.
Despite initial declines, sales of electric vehicles from BYD and other Chinese automakers rebounded in April, increasing by 59 percent. This surge occurred against a backdrop of Tesla's declining sales, attributed in part to consumer backlash against the company's CEO's political affiliations.
The tariffs, which are based on the extent of government support for Chinese automakers, have ironically encouraged the sale of gasoline vehicles, undermining the EU's goals for reducing greenhouse gas emissions. Only one-third of the cars sold by Chinese manufacturers in Europe during the first quarter were electric.
As Chinese brands adapt to market demands, they are gaining traction in European countries like Italy where charging infrastructure for electric vehicles remains limited. In regions with fewer local brands, such as Britain and Spain, Chinese automakers have found opportunities to expand their market presence.
While the traditional market leaders in Europe, such as Volkswagen and Renault, maintain significant shares, the rapid growth of Chinese brands has been noted. In April, they captured a larger share than other foreign competitors like Hyundai and Toyota.
Looking ahead, BYD is set to further increase its market share once it begins manufacturing vehicles in Hungary and Turkey next year, bypassing EU tariffs entirely. Analysts predict substantial growth for the company as it ramps up production in these locations.
Recent customers have expressed interest in BYD vehicles, recognizing potential long-term savings from electric vehicle ownership. However, concerns about the upfront costs remain a barrier for many potential buyers.