Chinese OEMs gain market share in UK and EU automotive markets as industry calls on policymakers to ensure fair competition
The market share of new vehicle sales in Europe held by Chinese OEMs has grown significantly in recent years, prompting policy debates in the UK and across EU member states to ensure domestic manufacturers can compete with the famous "China speed".
Chinese-owned brands including BYD, MG and Jaecoo accounted for nearly 20% of new UK vehicle registrations in the first seven months of 2026BYD
Chinese-owned OEMs are aggressively expanding into Europe, and the market share held by Chinese brands has grown dramatically in a very short period of time – in markets across the continent. But different policies towards imports from China have prompted these OEMs to adapt their strategies to different markets, such as the UK and the EU – where stricter EV tariffs in the EU have encouraged a more hybrid-first approach, in comparison with the UK's more lenient tariff structure, which has helped facilitate greater market penetration for Chinese EV brands. As European OEMs fight to compete with new entrants from China, industry leaders have turned to policymakers to ensure that regulations support a level playing field between domestic manufacturers and those from China.
According to Automotive Logistics' analysis of the latest available data from the Society of Motor Manufacturers and Traders (SMMT), marques that are majority-owned by Chinese entities represent 19.59% of total vehicle registrations to date in 2026. This reflects a significant increase from 11.79% for the same period in 2025. In June 2026, 35,245 vehicles from these Chinese-owned brands were registered in the UK – accounting for 22.51% of total UK car registrations last month.
Of the majority-Chinese-owned marques that sold vehicles in the UK this year, four were new market entrants that hadn't had a single new car registered in 2025: AION, Changan, Chery and Geely. Together, more than 31,500 vehicles were registered from these marques in 2026 – claiming 2.44% of the market in just a year and demonstrating how quickly new entrants from China can build a presence in the UK market.
The Jaecoo 7 was the fourth-most registered car model in July and the third-most registered model for the year-to-dateSMMT
And in terms of individual model registrations, the Jaecoo 7 ranks as the UK's third-most-popular car model for the year-to-date, with more than 26,500 vehicles registered in the first seven months of the year. The MG HS also features on the top 10 list, claiming the number-seven spot with more than 19,000 registrations.
Plus, in the BEV segment, the Jaecoo E5 ranked third for July registrations, with nearly 1,300 vehicles registered last month.
Further evidence of rising consumer interest in Chinese car brands has come from an IMAGIN.studio report, revealing that internet searches for seven of China's leading automotive OEMs (BYD, Jaecoo, Omoda, Xpeng, Chery, Geely and Zeekr) rose by 297% year-on-year, from 31 million in the first half of 2025 to 123 million in H1 2026.
"Chinese manufacturers have moved from a niche curiosity to a genuine force in the UK car market in the space of a year," commented Martijn Versteegen, CEO at IMAGIN.studio. "Growth like this reflects real, growing confidence among buyers in brands that, until recently, very few people in the UK had even heard of."
Versteegen added that this rise in popularity raises the stakes for the UK automotive sector, noting that building trust will be critical in order for these new entrants from China to maintain and grow their market share. This is something that some of these OEMs have already recognised and are investing in. For example, AION's decision to establish a dedicated parts warehouse and service parts logistics network in the UK was an important part of its 'Great 8 Promise', building customers' trust by offering support throughout a vehicle’s eight-year warranty period with servicing, roadside assistance and MOT.
As this data shows, brands from China – most of which launched in the UK within the past five years – have quickly gained a foothold in the UK automotive market. This is especially true in the new energy vehicle (NEV) segment. While Europe's legacy OEMs have had to transition their production lines and supply chains into producing and distributing alternative-powertrain vehicles, newer Chinese OEMs have had the luxury of a building dedicated new energy vehicle NEV manufacturing and logistics ecosystems from scratch. This, combined with the rapid development cycles of China's OEMs – which led to the coining of the phrase "China speed" – makes these brands a force to be reckoned with in the UK market.
Speaking during a virtual presentation at Automotive Logistics and Supply Chain UK in June, Catherine Zhu, logistics director for the UK at Omoda and Jaecoo, discussed the rapid sales growth of both brands and how the parent company, Chery Group, is preparing its supply chain and logistics operations to support further growth in the near future.
Such measures included setting up offices in London and Liverpool to manage both passenger car and commercial vehicle operations in the UK, as well as establishing its own service and repairs network throughout the nation.
And of course, a major development for Chery Group's 'In UK, For UK, Be UK' strategy is its plans to assemble vehicles at Nissan's plant in Sunderland using knock-down (KD) kits shipped from China. Zhu explained that this move will allow Chery Group to begin production in the UK quickly while building local supply chains.
“We are not just shipping cars to the UK, we are building a complete industrial and logistics footprint here, and the investments we have prioritised reflect that long-term commitment,” said Zhu.
Policy debate: UK ZEV mandate
One piece of UK government legislation at the centre of debate in the automotive industry is the zero-emission vehicle (ZEV) mandate, with prominent figures in the industry calling for regulatory reform to ensure the UK can continue to compete with the likes of China.
Entering into force in 2024 under Rishi Sunak's Conservative government, the ZEV mandate set out the percentage of new zero-emission cars and vans that manufacturers are required to sell each year up to 2030. By 2030, 80% of new cars and 70% of new vans must be zero-emission, rising to 100% of new cars and vans by 2035.
Previously, the ban on the sale of new diesel and petrol cars was scheduled for 2030, but it was delayed to 2035 "in line with other major global economies such as France, Germany, Sweden and Canada" to give consumers more time to switch to electric and to give the UK more time to upgrade its EV charging infrastructure.
In July 2026, the SMMT recorded a 44.5% year-on-year increase in new BEV registrations. However, it noted that the 27.4% market share held by BEVs in 2026 so far still falls short of the 33% target set out in the ZEV mandate.
"July’s record EV performance is a great achievement, reflecting industry’s huge investment in zero-emission mobility," said Mike Hawes, SMMT chief executive. "But that progress cannot be sustained if manufacturers continue haemorrhaging billions in EV discounts, distorting demand to avoid even steeper penalties."
Hawes emphasised that a sustainable transition to ZEVs cannot be achieved simply by compelling manufacturers to increase supply; he stressed that more needs to be done to ensure demand keeps pace with manufacturer's electrification efforts.
Speaking to The Guardian, Hawes asserted that several manufacturers are delaying investment in UK factories until the ZEV mandate is relaxed.
"We need urgent reform of the regulation, else Britain risks undermining its competitiveness and the jobs and livelihoods that depend on this industry," Hawes said in a statement.
But as reports claim the UK government is preparing a new consultation to review the ZEV mandate, several industry figures have written to UK secretary of state Heidi Alexander, calling for the government to stand firm on the ZEV mandate. In letter sent to the secretary of state, signed by representatives of more than 40 automotive industry stakeholders, signatories claimed that "the mandate is working" and noted that it "provides certainty to businesses by setting targets for the coming years".
The letter expressed a view that watering down targets or significantly extending flexibilities could jeopardise investor confidence and undermine billions of pounds of committed to in investment in the automotive production, charging infrastructure, business fleets and battery supply chains.
"Climate-fuelled wildfires are engulfing Europe, the price of oil is surging again and Chinese manufacturers are knocking on the door," said Blanche Shackleton, interim executive director of the Green Alliance. "The signs are clear that Andy Burnham’s government must double down on the switch to electric vehicles to deliver lower costs for households and businesses while driving investment in a future-proofed UK automotive industry."
The SMMT's Hawes has dismissed claims that the ZEV mandate is working as "anti-industry fiction" and suggested that those making such claims are "detached from the commercial realities of building and selling vehicles".
This debate has certainly split the industry, and the decision on reopening the possibility of amending the ZEV mandate remains with the UK government.
Chinese OEMs in Europe
Throughout Western Europe, new markets entrants from China – much like in the UK – have gained a significant share of the market. According to data from Schmidt Automotive Research, Chinese brands accounted for 10.7% of the new passenger car market in Western Europe in Q2 2026, up from just under 6% in Q2 2025. Since the beginning of 2025, the market share of vehicle registrations in the region held by Chinese brands has increased every quarter.
And according to Schmidt Automotive Research data reported by The Guardian, Chinese brands accounted for 14.2% of BEV registrations for the first five months of 2026 – equivalent to one in seven BEVs. China overtook the US in terms of market share of passenger EV registrations, gaining the second-biggest market share of any country outside Europe for this year to May.
Policy debate: EU tariffs on Chinese vehicle imports
On top of the EU's standard 10% most favoured nation (MFN) tariff on vehicles entering the EU from abroad, the trade bloc has imposed additional tariffs on BEVs exported from China. In October 2024, following the conclusion of the European Commission's anti-subsidy investigation, measures entered into force imposing tariffs at different rates for different OEMs. The countervailing duties, imposed for a period of five years and added on top of the 10% MFN rate, were set out as follows:
BYD: 17.0%
Geely: 18.8%
SAIC: 35.3%
Tesla: 7.8% (applies to vehicles exported from Tesla's Shanghai gigafactory)
Other companies that cooperated with the European Commission's investigation: 20.7%
Other companies that did not cooperate with the European Commission's investigation: 35.3%
The company-specific nature of the EU's tariffs is due to the investigation conducted by the European Commission, assessing the level of subsidisation received by individual OEMs from the Chinese government. The European Commission stated that the purpose of these countervailing measures was to "remove the substantial unfair competitive advantage of Chinese BEV producers due to the existence of unfair subsidy schemes in China", noting an aim to ensure that the EU and China's automotive industries compete on a level playing field, rather than to close the EU market to such imports.
During Volkswagen Group's H1 2026 investor call, Volkwagen CEO Oliver Blume said that the company's approach to competing with China has involved Volkswagen doing its own "homework" in terms of ensuring that its products are competitive and attractive to customers, while reducing costs. He noted that just as Chinese OEMs have broken into Europe, so too has Volkswagen grown its presence in the Chinese market.
Beyond what a single OEM can achieve, however, he noted that politics has a role to play in the competitiveness of the European automotive industry compared with China.
"We need a level playing field – not more, not less," he stated. "In some areas such as the regulation of BEVs, the regulation is working – there we are competitive – but where it is not working is the plug-in hybrids, for example."
Blume pointed towards upcoming 'Made in Europe' regulation as a means to address this. "The politics have to accelerate the upcoming decisions in terms of PHEVs and the 'Made in Europe' strategy," he said.
Discussing timelines for the EU to take action to "level the playing field" on PHEVs, Blume said that he expects decisions to be made this year.
"We have no time to lose," he said, later describing Chinese competition as "the biggest risk for the whole European auto industry right now."
Additional pressure on capacity
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An important impact of the aggressive expansion strategies demonstrated by Chinese OEMs in Europe is additional pressure on an already constrained logistics network. As Chinese vehicle exports into Europe ramp up, so too will the logistics activity required to handle, store and distribute them. With Chinese brands rapidly expanding their presence in European markets, Europe's established OEMs aren't just competing with Chinese brands for market share, they're also competing for logistics capacity.
She pointed towards the fact that at least 133 pure car and truck carriers (PCTCs) were on order in June as evidence that the industry expects vehicle volumes to continue increasing.
"1 million cars from China are currently estimated to come in containers," Chow said. "So maybe 1 million can be moved to ro-ro capacity, but is that enough for the new 133 ships on order?”
Chow also highlighted the growing volume of vehicles sitting building up at ports, compounds and other storage facilities. Comparing Chinese export data with registration data for Chinese-brand vehicles, she found significant discrepancies in several European markets.
In the UK, for example, she identified 336,000 direct exports from China against 217,000 Chinese-brand vehicles sold, leaving a surplus of almost 120,000 vehicles. Chow said this could represent vehicles “sitting somewhere or ready to be re-exported somewhere else”, while suggesting that port and compound expansions were taking place to accommodate this additional volume.
