A strong east wind blew through the recent Paris Motor Show, the biennial showcase for the European car market. Among expected marques such as Citroen, Peugeot, VW and Mercedes, nearly 25 Chinese electric automakers from LI Auto to Geely and Zeekr nudged their way onto central stage at the pivotal Porte de Versailles event.
Days earlier, arriving at Paris Charles de Gaulle Airport, I was greeted by advertising posters featuring Daniel Craig, aka James Bond, who serves as a brand ambassador for Denza, a luxury plug-in electric car company and a joint venture between China’s BYD Auto and Germany’s Mercedes-Benz.
No, this wasn’t jet lag but a jolting reality shock.
Chinese electric cars made their debut in 2006 when the Great Wall brand appeared on a crowded stage; today, about 25 of the 60 major exhibitors were electric marques from China. That’s double the number from 2024.
The Chinese electric car industry is marching into
The Chinese electric car industry is marching into a fragmented and sometimes struggling European auto marketplace, where iconic brands face serious market pressure. EU passenger car production has fallen by nearly 2.6 million units since 2019, a 19% drop.
Covid-19 restrictions, a changing demography, and a powerful “green movement” have led many buyers away from petrol cars. China is profiting from this, despite piecemeal EU tariff efforts to block the wave.
Mercedes had a showstopper exhibit of elegance and class with a full line of passenger cars and SUVs. It has also revived its tiny Smart Car, built in China at a reasonable price, to re-enter the European market. Volvo, meanwhile, is partnering with China’s high-end LYNK, offering a classy-looking trio of options and stressing the Swedish connection and a strong, established European network of sales and repair facilities.
Volkswagen’s CEO Oliver Blume urged France and Germany
Volkswagen’s CEO Oliver Blume urged France and Germany to strengthen cooperation to meet serious competitive pressure from Chinese automakers.
But is the legendary EU regulatory structure up to the serious onslaught? “Chinese-built EVs are gaining market share in the EU, passing 20% of total EV sales in 2026, equivalent to over 5% of total vehicle sales,” an economic think tank. “More than half of these EVs were Western-branded automobiles made in China.”
In 2024, the EU introduced duties ranging from 7.8% to 35.3% on Chinese-produced automobiles. In the US, the Trump administration has focused on blocking Chinese vehicle imports through tariffs and legitimate national security concerns.
The European Commission is drafting the Industrial Accelerator
The European Commission is drafting the Industrial Accelerator Act, which would tie public incentives to at least 70% EU-ced in the EU by Asian firms. Hungary hosts a $5 billion (168.75 billion baht) BYD EV assembly plant and an $8 billion Chinese battery cell production line. South Korea’s Samsung battery cell production is based in Hungary, while Poland hosts a $3.5 billion LG-Energy battery cell plant
Amid the growing Chinese presence, there’s a bright spot for the French: the iconic Citroen 2CV, the small but beloved deux Chevaux, long out of production, is being revived with an electric version, which was one of the European stars of the show. European makers from VW to Skoda, Mercedes to Audi, and even Opel have electric models, often at affordable prices.
But the perception that Chinese cars entering the European market are inexpensive and shoddy competitors to established European brands is misleading. Chinese brands are targeting the SUV and luxury car market, with some models on par with European offerings from Mercedes, Audi, and Volvo. AITO is the world’s No.1 Chinese luxury automaker to make the top 10 global luxury automotive brands list. AITO is expected to enter the European market in 2027.
There’s a bigger picture and, indeed, market concern
But there’s a bigger picture and, indeed, market concern. China’s industrial policy has targeted Europe with both affordable and high-tech market segments. This becomes a competitive challenge and a national security concern, given the implications of job losses, plant closings, and outclassed technology for the once-vibrant European auto industry.
The US auto industry has a looming lesson, too. China’s road to a respected auto industry, and not copycat cars, underscores Beijing’s state-centred policies by using the economic wedge of market competition. It’s in the national interest of both Washington and Europe to recognise this challenge before it’s far too late.
John J Metzler is a United Nations correspondent covering diplomatic and defence issues. He is the author of ‘Divided Dynamism: The Diplomacy of Separated Nations; Germany; Korea, China’.
