High oil prices and booming electric vehicles! Chinese carmakers' sales in Europe are back to growth.

Chinese automotive brands are regaining momentum in Europe. After a brief downturn at the start of the year, Chinese car makers' market share in Europe rebounded sharply in February, nearly doubling compared to a year earlier. Meanwhile, turmoil in the Middle East has pushed oil prices higher, further accelerating European consumers’ shift to electric and hybrid vehicles and providing extra support for Chinese brands.

On Friday, Bloomberg cited Dataforce research showing that Chinese brands represented by BYD and Leapmotor saw their overall share in the European passenger car market rise to 8% in February, nearly double last year’s 4.2%.

In the pure electric vehicle segment, Chinese brands' market share rose two percentage points from January to 14%; among hybrid models, their share increased one percentage point to 16% month-on-month.

Meanwhile, Chinese car manufacturers’ overseas expansion is not limited to Europe. In 2025, BYD’s sales in six major Southeast Asian markets grew by about 95% year-on-year, engaged in fierce competition with Vietnamese automaker VinFast, jointly reshaping the region’s EV landscape.

Europe market share nearly doubled, Chinese brands back on the growth track

Dataforce data shows that Chinese brands account for a combined 8% share of passenger car markets in the EU, EFTA member states, and the UK, up from just 4.2% a year ago.

This growth builds on a record performance in 2025. Models like Chery’s Omoda 5 and Jaecoo 7 have become increasingly visible throughout Europe, as Chinese brands attract value-conscious consumers by expanding dealership networks and offering substantial discounts.

Dataforce analyst Julian Litzinger said, "Chinese brands are offering attractive products in some segment niches that were previously blank in the market," noting that hybrids in particular hold further growth potential.

To avoid tariff barriers and further lower costs, Chinese carmakers are accelerating localized production in Europe. Chery has launched vehicle assembly in Barcelona, Spain, and BYD is speeding up factory construction in Hungary.

Southeast Asia battleground: BYD and VinFast compete for emerging markets

Beyond Europe, Southeast Asia is becoming a key overseas growth driver for Chinese carmakers.

In 2025, BYD's sales in six major Southeast Asian markets grew about 95% year-on-year, delivering around 70,000 vehicles for the year; VinFast, from Vietnam, saw sales grow around 90% and sold over 100,000 vehicles in Indonesia, Vietnam, Thailand, and other markets. The two companies together accounted for about 7% of the region’s total 2.4 million vehicle sales, and their rapid rise has clearly impacted the market share of Toyota, Honda, Mitsubishi, and other Japanese brands.

Strategically, BYD leverages its strengths in plug-in hybrid technology and partnerships with ride-hailing platforms like Grab to ease consumer concerns about insufficient charging infrastructure; VinFast focuses on low pricing, investing actively in charging networks and local manufacturing. BYD has established a production base in Thailand and is advancing new capacity layouts in Indonesia and Cambodia.

On the financial side, the two companies show obvious differences. BYD remains profitable with ample cash reserves; VinFast is still operating at a loss due to large-scale expansion and relies on parent company funding to sustain its global strategy.

Soaring oil prices boost Chinese EVs

Conflict in the Middle East has sent oil prices soaring, and the closure of the Strait of Hormuz has further heightened concerns about energy supply. Bernstein analysts believe the situation may accelerate EV adoption and lift hybrid demand, providing extra momentum for Chinese brands.

"Among Chinese carmakers, we believe BYD will benefit from higher profit margins brought by overseas EV sales, as its affordable EV lineup offers obvious competitive advantages," wrote Bernstein analyst Eunice Lee and her team in a research report.

Risk Warning and DisclaimerThe market has risks, investment needs caution. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, viewpoints, or conclusions in this article are appropriate for their particular situation. Investments are made at your own risk.