President Trump’s trade war appears to be doing reputational damage to the US auto sector overseas.
In its Chinese Automotive Brands Impact study, research firm Escalent found several trends in European car buyers’ decision-making. The study found that 47% of buyers would consider a vehicle from China, whereas only 44% would consider an option from a US automaker. In 2024, those figures were flipped, with 31% considering Chinese vehicles and 51% considering American.
The study polled 1,692 respondents from May 21 to July 31 of this year.
“Although the study wasn’t intended to assess why consideration was changing over time outside of Chinese brands, I believe that geopolitics (tariffs, trade deals, the US stance on Russia/Ukraine) is playing into European buyers’ sentiment about the US and US auto brands,” Escalent vice president of powertrain innovation KC Boyce said to Yahoo Finance.
Boyce noted that consideration of automotive brands from other countries also increased year over year, with the US being the lone exception.
In addition, general levels of trust in goods from various countries stayed the same or increased for every country except the US, Boyce said.
For instance, the level of trust for goods from Japan increased to 54% from 50%, South Korean goods to 34% from 30%, and Chinese goods to 19% from 12%.
The US? Trust levels fell to 24% from 31%.
Price also plays a part in the equation. Buyers in Europe have widely held expectations that Chinese vehicles will be cheaper, even if they’re objectively superior, Boyce said, adding, “I think this certainly plays into issues of affordability.”
An interesting difference between European and US car buyers, for example, is that a substantial portion of European buyers still consider EVs, which helps the Chinese brands, as they offer many EVs in the EU.
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“While I wouldn’t say the data points to a strongly or widely held belief, it does appear that European buyers tend to think of Chinese BEVs as being more trustworthy purchases,” Boyce said.
Recent sales data reflects this trend. Sales reports from certain EU countries show that Tesla (TSLA), easily the biggest US EV maker, is still seeing demand issues,
Per the European Automobile Manufacturers’ Association (ACEA), Tesla EV registrations — a proxy for sales — in Europe fell to just 8,837 units in July, a 40.2% drop compared to a year ago. Meanwhile, total EV registrations in the region, which includes the UK and the European Free Trade Association (EFTA), rose 33.6% in July, with overall registrations regardless of powertrain up 5.9%.