Chinese EV brands keep gaining ground in Western Europe — and the next fight may be over PHEVs

Tariffs have made China-built electric cars more expensive to sell in the European Union, but they have not produced a simple retreat. Instead, Chinese automakers are changing where they sell, what they sell and, increasingly, where they build.

The latest numbers illustrate that adjustment. Data from Schmidt Automotive Research, cited by The Guardian, shows Chinese brands sold around 171,800 battery-electric vehicles across 18 major Western European markets during the first five months of 2026.

That gave them 14.2% of the region’s BEV market, almost five percentage points more than during the same period a year earlier.

It is a striking figure, but also one that needs context. The 18-market dataset covers Western Europe, not the European Union alone — and one of the most important markets in that total is the United Kingdom.

The UK changes the picture

Britain accounts for roughly a quarter of Chinese-brand BEV sales in the 18 markets covered by the data. That matters because the UK is no longer part of the EU and does not apply the bloc’s additional countervailing duties on China-made BEVs.

So the 14.2% figure cannot simply be used to argue that the EU tariffs have failed. Chinese manufacturers are operating across markets with different tax and trade conditions, and their European performance reflects that mix.

What is harder to dismiss is the steady expansion of their product range. Buyers are no longer choosing from only a handful of relatively inexpensive Chinese EVs. The field increasingly stretches across compact cars, mainstream SUVs and more expensive models.

That also changes the nature of the competition. European manufacturers are now being challenged on equipment, software, charging capability, design and model-cycle speed as well as price.

There is no single “China EV tariff” rate

The EU’s definitive anti-subsidy measure applies to battery-electric vehicles manufactured in China and imported into the bloc. The additional duty depends on the producer rather than being a flat 35.3% charge on every vehicle.

Current rates range from 7.8% to 35.3%. They include 17.0% for BYD, 18.8% for Geely and 35.3% for SAIC. Tesla’s Shanghai operation received an individually calculated rate of 7.8%.

That distinction is important. A Chinese-owned brand producing cars in Europe is in a different position from the same company shipping China-made BEVs into the EU.

Manufacturing location is therefore becoming part of the competitive strategy. So too is powertrain choice.

PHEVs offer another route

The current EU countervailing measure is focused on China-made BEVs. Plug-in hybrids are not covered by the same action, giving manufacturers another way to compete when importing a battery-electric model becomes more expensive.

That makes PHEVs an obvious area for Chinese automakers to expand, particularly while they are also preparing more European manufacturing capacity.

But policymakers are already paying attention. In June 2026, German newspaper Handelsblatt reported that the EU was preparing possible additional measures covering Chinese plug-in hybrids. Reuters subsequently carried the report.

The European Commission declined to comment at the time, which means this should still be treated as a developing policy issue rather than a tariff that has already been approved or implemented.

The bigger advantage may be flexibility

The most important lesson from the 14.2% market share may therefore have little to do with one headline number.

Chinese manufacturers are showing that they can react to trade barriers in several ways: sell more vehicles in non-EU European markets, broaden their PHEV line-ups, establish local manufacturing or alter which products are shipped from China.

Not every strategy will work equally well, and tariffs still affect pricing and profitability. But companies with enough scale, products and manufacturing flexibility have more options when the rules change.

Why Malaysia should pay attention

Western European market share cannot be used as a direct forecast for Malaysia. The two markets have very different taxes, emissions rules, charging infrastructure and buyer priorities.

The significance for Southeast Asia is instead in the scale these manufacturers are building. Larger overseas volumes can support investment in new vehicle platforms, batteries, software and powertrain technology, while localised production can reshape how different factories supply different regions.

For Malaysian buyers, those decisions could eventually influence which BEVs and PHEVs arrive here, how quickly new models are launched and how aggressively brands compete on price and ownership support.

Move Auto's Take

Tariffs matter, but adaptability may matter more. The companies best placed to navigate Europe are increasingly those able to switch between exports, local production and different powertrains when regulation changes. That capability will not stay confined to Europe. As these manufacturers become more global, the same production and product decisions could eventually reshape what they offer in Southeast Asia.

Follow Move Auto for more coverage of the global automotive industry, EVs, PHEVs and the market shifts that could eventually affect Malaysian car buyers.