Xpeng CEO He Xiaopeng speaks to reporters on the electrical carmaker’s stand on the IAA auto present in Munich, Germany on September 8, 2025.
Arjun Kharpal | CNBC
Germany this week performed host to one of many world’s greatest auto exhibits — however within the heartland of Europe’s auto business, it was buzzy Chinese language electrical automotive firms seeking to outshine a number of the area’s greatest manufacturers on their residence turf.
The IAA Mobility convention in Munich was packed filled with firms with large stands exhibiting off their newest vehicles and expertise. Amongst a number of the greatest shows had been these from Chinese language electrical automotive firms, underscoring their ambitions to broaden past China.
Europe has turn into a focus for the Asian corporations. It is a market the place the normal automakers are seen to be lagging within the growth of electrical automobiles, whilst they ramp up releases of recent vehicles. On the identical time, Tesla, which was for therefore lengthy seen as the electrical car market chief, has seen gross sales decline within the area.
Regardless of Chinese language EV makers going through tariffs from the European Union, gamers from the world’s second-largest economic system have responded to the ramping up of competitors by setting aggressive gross sales and enlargement targets.
“The present development of Xpeng globally is quicker than we’ve got anticipated,” He Xiaopeng, the CEO of Xpeng advised CNBC in an interview this week.
Aggressive enlargement plans
Chinese language carmakers who spoke to CNBC on the IAA present signaled their formidable enlargement plans.
Xpeng’s He stated in an interview that the corporate is seeking to launch its mass-market Mona collection in Europe subsequent yr. In China, Xpeng’s Mona vehicles begin on the equal of just below $17,000. Bringing this to Europe would add some severe value competitors.
In the meantime, Guangzhou Vehicle Group (GAC) is focusing on fast development of its gross sales in Europe. Wei Haigang, president of GAC Worldwide, advised CNBC that the corporate goals to promote round 3,000 vehicles in Europe this yr and no less than 50,000 models by 2027. GAC additionally introduced plans to carry two EVs — the Aion V and Aion UT — to Europe. Leapmotor was additionally in attendance with their very own stand.
There are indicators that Chinese language gamers have made early in roads into Europe. The market share of Chinese language automotive manufacturers in Europe almost doubled within the first half of the yr versus the identical interval in 2024, although it nonetheless stays low at simply over 5%, in accordance with Jato Dynamics.
“The numerous presence of Chinese language electrical car (EV) makers on the IAA Mobility, alerts their rising ambitions and confidence within the European market,” Murtuza Ali, senior analyst at Counterpoint Analysis, advised CNBC.
Tech and devices in focus
Most of the Chinese language automotive corporations have positioned themselves as expertise firms, very similar to Tesla, and their vehicles spotlight that.
Most of the electrical automobiles have massive screens geared up with flashy interfaces and voice assistants. And in a bid to lure consumers, some firms have included extra devices.
For instance, GAC’s Aion V sported a fridge in addition to a therapeutic massage perform as a part of the seating.
The Aion V is among the vehicles GAC is launching in Europe because it appears to be like to broaden its presence within the area. The Aion V is on show on the firm’s stand on the IAA Mobility auto present in Munich, Germany on September 9, 2025.
Arjun Kharpal | CNBC
That is a method that the Chinese language gamers sought to distinguish themselves from legacy manufacturers.
“The probabilities of success for Chinese language automakers are robust, particularly as they’ve an edge when it comes to affordability, battery expertise, and manufacturing scale,” Counterpoint’s Ali stated.
Europe’s carmakers push again
Legacy carmakers sought to flex their very own muscle mass on the IAA with Volskwagen, BMW and Mercedes having among the many greatest stands on the present. Mercedes specifically had promoting displayed all throughout the entrance entrance of the occasion.
BMW, just like the Chinese language gamers, had a giant concentrate on expertise by speaking up its so-called “superbrain structure,” which replaces {hardware} with a centralized laptop system. BMW, which launched the iX3 on the occasion, and chipmaker Qualcomm additionally introduced assisted driving software program that the 2 firms co-developed.
Volkswagen and French auto agency Renault additionally confirmed off some new electrical vehicles.
Whatever the product blitz, there are nonetheless issues that European firms aren’t transferring quick sufficient. BMW’s new iX3 relies on the electrical car platform it first debuted two years in the past. In the meantime, Chinese language EV makers have been fast in bringing out and launching newer fashions.
“A dedication to legacy constructions and incrementalism has slowed its potential to construct and leverage a sturdy EV ecosystem, leaving it behind fast paced rivals,” Tammy Madsen, professor of administration on the Leavey College of Enterprise at Santa Clara College, stated of BMW.
Whereas European autos have a robust model historical past and their CEOs acknowledged and welcomed the competitors this week in interviews with CNBC, the Chinese language aren’t letting up.
“Europe’s automakers nonetheless maintain vital model worth and legacy. The problem for them lies in attaining manufacturing at scale and adopting new applied sciences quicker,” Counterpoint’s Ali stated.
“The Chinese language absolutely aren’t ready for anybody to catch-up and are making vital positive factors.”