Europe Automobiles

Research evidence excerpt

Europe Automobiles

Goldman Sachs Europe Automobiles

Supply Monitor

Rising protectionism as Chinese brands gain share in Europe - As Chinese automakers

rapidly expand in Europe, the region is responding with a tightening wave of

protectionist measures spanning trade tariffs and environmental enforcement. Following

its 2024 duties on China-made battery electric vehicles, the European Commission is

now preparing to extend countervailing duties to Chinese hybrid cars, according to

media reports (link). In parallel, since Hungary’s new government took office in April,

Environment Minister has threatened to shut down EV battery factories that fail to meet

environmental regulations, affecting players such as CATL, Samsung SDI, and BYD (link).

Meanwhile, battery-side constraints at CATL are beginning to affect European OEM

output as well, with Mercedes among those impacted (link).

Our view: While these measures may pose a short-term hurdle, we believe they are

unlikely to derail Chinese brands’ momentum. Even against BEV tariffs of up to c.45%,

Chinese automakers have continued to gain share. Indeed, S&P Global data shows a

modest reduction in Chinese brands’ production volumes in Hungary, indicating that

tapping into brownfield overcapacity from European OEMs may have become the

preferred route, as seen in the Stellantis & Leapmotor/Dongfeng collaboration and BYD’s

reported scouting of a brownfield factory (link), which have added estimated production

volume elsewhere (Exhibit 5).

Exhibit 3: Chinese brands* production volume in Europe is Exhibit 4: The upward revision of Chinese brands* in

expected to grow at 145% CAGR from 2025 to 2030, Jun-26 is mainly driven by Chery and Leapmotor.

according to S&P Global. Estimates as of Jun-26. Production volume in units.