BYD Seal U plug-in hybrid: The model was the best-selling of its drive form in Europe in 2025. Photo: BYD [M]
Dusseldorf. Car brands from China continue to gain market share in Europe – albeit differently than expected. As data from the industry service provider Dataforce for Handelsblatt shows, the share of Chinese car manufacturers is growing significantly faster than the overall European market. While total new registrations rose by two percent, Chinese car manufacturers almost doubled their sales.
The decisive factor here is less – as long feared in the European Union (EU) – purely electric cars, but rather plug-in hybrids (PHEV) with electric and combustion engines. Here the Chinese increased their sales enormously in 2025 – by more than 600 percent.
According to the data, BYD’s Seal U was the best-selling plug-in hybrid in Europe with a good 72,800 new registrations in 2025, overtaking Volkswagen’s Tiguan SUV in this category, which only had around 66,000 sales. The evaluation includes all 27 EU states as well as Great Britain, Norway, Iceland and Switzerland.
Not only at BYD, but also at MG, another relevant brand from China, hybrid registrations now dominate – unlike a few years ago, when the focus was clearly on purely electric cars.
In November and December, Chinese manufacturers even achieved higher market shares across all drive systems in Europe than the Korean car manufacturers Hyundai and Kia, which have been established for decades.
Chinese car brands are also gaining visibility in Germany: BYD and MG sold more cars in this country in 2025 than the US car manufacturer Tesla, according to the Federal Motor Transport Authority (KBA). In December, BYD was ahead of Peugeot, Citroën and Fiat in the KBA statistics – just behind Kia.
“This is a wake-up call to German and other European car manufacturers to keep an eye on the Chinese and step up their game themselves,” says Beatrix Keim, head of the Center of Automotive Research (CAR) in Duisburg.
The success of Chinese plug-in models has a clear political background. For Chinese car manufacturers, PHEVs are a way to avoid the high tariff surcharges on purely electric cars.
Basic tariff of ten percent for plug-in hybrids
For plug-in hybrids, on the other hand, there is only a basic tariff of ten percent – without countervailing duties. Since the introduction of the measure, the number of plug-in registrations of Chinese manufacturers has increased significantly.
PHEV registrations from Chinese manufacturers in Europe increased by a combined 645 percent in 2025, while the entire European plug-in market only grew by 33 percent.
BYD showroom: The car manufacturer is selling more and more plug-in hybrids. Photo: Bloomberg/Getty Images
Chinese manufacturers are also increasingly investing in plants in and around Europe: BYD, for example, is setting up production facilities in Hungary and Turkey. In Manisa, Turkey, BYD wants to build its plug-in flagship Seal U and sell it duty-free to EU countries. Chery, GAC and Xpeng also already produce in Europe.
BYD and Co. have more than quadrupled their PHEV market share
German manufacturers currently have a strong position when it comes to drive types in Europe: in 2025, according to the CAR, VW, Mercedes and BMW accounted for more than half of the registrations, with the VW Group alone accounting for 30 percent. But the Chinese are quickly catching up: while they still had a share of around three percent in 2024, it was already 14 percent in 2025.
Gregor Williams from the US think tank Rhodium Group says: “It is well known that brands like BYD and MG consistently use plug-in hybrids in order not to pay countervailing duties to the EU.” Nevertheless, the expert is surprised at how quickly individual models have moved ahead of the vehicles from established manufacturers.
The fact that this strategy works fits the mood of many customers. According to a survey by Deutsche Automobil Treuhand that has not yet been published, 29 percent of German car owners could basically imagine driving a Chinese car. A year ago the value was 25 percent.
Across Europe, the new Chinese models are on the rise, especially in Italy, Spain and Great Britain: According to official statistics, in the United Kingdom the market share of Chinese manufacturers almost doubled – from 4.9 percent in 2024 to 9.7 percent in 2025. In Italy the share is also more than eight percent and in Spain it is more than ten percent. In Germany, the market share has also increased – but at a significantly lower level: from 0.9 percent in 2024 to two percent in 2025.
These countries are also among the most important markets for the PHEV bestseller Seal U. Most vehicles were sold in the United Kingdom, followed by Italy, Spain and Germany.
At the IAA motor show in September, many Chinese brands presented new plug-in models in addition to electric cars. BYD showed its Seal 6 DM-i Touring hybrid station wagon shortly before the start of the trade fair in Munich.
Even China’s most important export brand Chery is not launching a pure electric car in Germany, but rather a plug-in model: the Jaecoo 7. In Europe, the 2025 SUV is already one of the bestsellers in its class and is ahead of the plug-in versions of the Golf or BMW X3.
Jaecoo 7 from Chery: Popular in Europe. Photo: Chery/dpa-tmn
MG is also in the top 10 list of the most approved plug-ins in Europe with its hybrid SUV HS. The traditional British brand belongs to the Chinese state-owned company SAIC, whose electric cars are particularly hard hit by Brussels regulations with a 35.3 percent countervailing duty. Accordingly, growth is shifting towards hybrids.
Chinese cars are often significantly cheaper
A key success factor for the Chinese is price. In Germany, the Seal U starts at 39,990 euros, which is around 12,250 euros below the base price of the Tiguan (52,215 euros). Demand benefits from the fact that many customers can hardly afford the significantly increased car prices. According to Eurostat, the price level for new cars is currently 27 to 28 percent higher than in 2016.
Basically, plug-in hybrids are attractive to manufacturers for three reasons: They help to comply with the EU’s CO₂ fleet limits, which can result in high penalties if they are not met. They also appeal to customers who do not yet want to switch to a fully electric car (BEV). And they generally bring higher margins than pure electric vehicles.
Accordingly, the segment is growing rapidly. In Europe, semi-electric vehicles are currently gaining ground faster than any other type of drive. In the first ten months of 2025, sales rose by around 30 percent compared to the same period last year. According to the European car association ACEA, the share of plug-ins in total sales in Europe was nine percent in the first eleven months of last year – around two percent more than in 2024.
At the same time, politicians are sending supportive signals: In its “Automotive Package” in mid-December, the EU Commission decided to allow plug-in hybrids as an option for new cars even after 2035.
In Germany, two political factors also favor the trend – firstly, the company car privilege: for plug-in hybrids, the tax offices only estimate 0.5 percent of the gross list price as a monetary benefit instead of one percent.
On the other hand, the federal government has just decided to offer an electric car bonus retroactively to January 1st, which also applies to PHEVs – but only under certain criteria.
PHEVs will become even more important in the future
The vehicles must be able to drive at least 80 kilometers purely electrically or emit less than 60 grams of CO₂ per kilometer. According to BYD, the plug-in top seller Seal U meets these conditions with the exception of its most expensive “Design” variant.
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“Plug-in hybrids are likely to play an increasingly important role in the future,” says CAR expert Keim. EY industry expert Constantin Gall also considers the drive form to be relevant for the time being: “Manufacturers would do well to continue to invest here and ensure an attractive offering.”
Keim, however, limits the fact that BYD also achieved some of its growth through tactical approvals – for example through deliveries to car sharing providers such as Finn and Faaren. In the medium term, it is “crucial” to also convince private buyers. The expert sees German manufacturers at an advantage here: “Customers trust German brands more – and the Chinese still have to catch up significantly when it comes to their dealer and service network.”