Chinese automakers, led by BYD, surge in Europe thanks to PHEVs

Chinese automakers posted a significant sales gain in Europe this February, shrugging off mounting trade pressure from the European Union. Leaning into plug-in hybrids has helped them offset the punitive EU tariffs.

BYD, in particular, is leading the charge — topping domestic sales, previewing record-breaking profits, and deepening its presence in key European markets.

The latest data from market research firm Dataforce shows that Chinese brands sold 38,902 cars in Europe in February, up 64 percent from the same month a year earlier. This pushed their combined market share to 4.1 percent, up from 2.5 percent one year earlier. 

Key growth channel

That growth came despite regulatory headwinds, including excess duties of up to 35.3 percent introduced by the European Union targeting Chinese-built electric vehicles. These duties are set to remain in place for five years, but by accelerating their local presence, both in showrooms and in production, the Chinese brands are showing resilience.

For example, Chinese manufacturers are turning to alternative production methods to mitigate tariffs. Starting in June, XPeng and GAC will begin the semi-knockdown assembly of vehicles at Magna’s factory in Graz, Austria. This allows Chinese brands to ship parts rather than fully assembled cars, reducing duties and production costs.

They also adapted their offerings. While battery-electric vehicle registrations from China declined 3.4 percent year-on-year in February to 11,116 units — while overall European BEV sales rose 26 percent —their plug-in hybrid electric vehicles, exempt from the extra levies, surged 321 percent to 4,744 units. These hybrids have become a key growth channel.

Triumvirate

BYD’s Seal U leads the PHEV charge, with 2,281 units sold in February. It was followed by SAIC-owned MG’s HS plug-in hybrid (1,079 units) and Chery’s Jaecoo 7 (971 units), which debuted strongly.

Gasoline-powered models also contributed to the surge, growing 27 percent to 11,798 units. Standout performers included Chery’s Omoda and Jaecoo brands and MG’s combustion-powered offerings.

BYD, SAIC (MG), and Chery accounted for nearly all of the 15,200-unit increase in Chinese sales in Europe, according to Dataforce. Smaller players, such as Nio, Zeekr, Aiways, Lynk & CO (and Lotus), struggled to gain traction. Nio, for example, reported just 73 units sold in February, down sharply compared to its early momentum in Europe.

BYD’s global success

BYD, however, continues to lead on multiple fronts. The company announced that first-quarter global sales of New Energy Vehicles (NEVs), including BEVs and PHEVs, surpassed one million units for the first time, up 60 percent from Q1 2024. March alone accounted for 377,420 NEVs sold. Overseas sales also hit a record 72,723 units for the month.

These substantial delivery numbers are translating into surging profits. BYD expects Q1 2025 net income to amount to RMB 10 billion (€1.2 billion), representing year-on-year growth of nearly 119 percent – with final confirmation pending. Even as sales dipped slightly compared to Q4 — traditionally a stronger period — Q1 still marked BYD’s best first-quarter performance to date.

Europe remains a central pillar of BYD’s global ambitions. The company recently announced it has entered the Swiss market with three models — the Seal electric sedan, the Sealion 7 SUV, and the Seal U DM-i plug-in hybrid.

At the same time, BYD is pushing ahead with localized manufacturing. The new factory in Hungary, with an annual capacity of 350,000 vehicles, is set to come online later this year.