The numbers tell a story that would have seemed impossible a decade ago. In 2025, for the first time on record, the value of cars and auto parts shipped from China into the European Union exceeded what the EU exported to China in return. For the global automotive industry, this represents a symbolic and economic watershed moment.
According to a new analysis by consultancy agency EY, EU exports of vehicles and parts to China fell by 34% in 2025 to €16 billion. Since 2022, those exports have more than halved.
Chinese imports into the EU, meanwhile, rose 8% to €22 billion. The result: a trade surplus of €23 billion in 2019 has swung to a deficit of €6 billion in just six years.
Germany’s China Problem
The figures are particularly striking for Germany, the longtime backbone of European automotive manufacturing. In 2025, China dropped from second to sixth place among Germany’s export markets for cars and components. These exports fell 33% to €13.6 billion, while Chinese vehicle and parts imports into Germany surged two-thirds to €7.4 billion.
“If current trends continue, imports and exports could reach parity as early as 2026,” said Constantin Gall, EY’s automotive expert. “Competition will intensify further, and pressure on Germany as an automotive hub will keep rising.”
The structural picture is sobering as the Chinese surge doesn’t happen without repercussions. The German automotive sector shed nearly 50,000 jobs in 2025, bringing the total workforce to 725,000, its lowest level in 14 years. Revenue across the industry slipped 1.6% to around €528 billion.
But suppliers have been hit hardest: roughly one in four jobs in that segment has disappeared since 2019, with major cuts at suppliers such as Bosch and ZF, and multiple plant closures.
Tariffs haven’t changed the trend
This reversal has happened despite the EU’s decision to impose additional tariffs on Chinese-built electric vehicles. This measure was explicitly designed to protect domestic manufacturers. Though these barriers have slowed some Chinese brands’ momentum in certain markets, they clearly haven’t reversed the broader trade tide.
Much of German industry’s pain stems from the uneven pace of EV adoption. Heavy investments made in anticipation of rapid EV growth have been slow to generate returns, pushing some manufacturers – including Porsche and Mercedes-Benz – to revisit their internal combustion engine strategies.
China, by contrast, has continued to accelerate its EV transition at home. Its carmakers are increasingly competitive abroad, able to offer zero-emission technology the EU craves at a more accessible price point.
The numbers from EY put a precise figure on what many in the industry already sensed: the balance of power in global automotive manufacturing is fundamentally shifting.
