High oil prices, booming electric vehicles! Chinese automakers are returning to growth in sales across Europe.

Chinese automotive brands are regaining momentum in Europe. After a brief slump at the beginning of the year, Chinese car manufacturers saw a significant rebound in their market share in Europe in February, nearly doubling compared to a year ago. At the same time, the situation in the Middle East has driven oil prices to soar, further accelerating the shift of European consumers toward electric and hybrid vehicles, providing additional support for Chinese brands.

On Friday, Bloomberg reported, citing data from research firm Dataforce, that Chinese brands represented by BYD and Leap Motor saw their overall share in the European passenger car market rise to 8% in February, nearly doubling from 4.2% during the same period last year.

In the pure electric vehicle segment, the share of Chinese brands rose two percentage points from January to 14%; in hybrid models, the share also increased by one percentage point to 16%.

Meanwhile, the overseas expansion of Chinese car manufacturers is not limited to Europe. BYD’s sales in six major Southeast Asian markets are expected to grow by about 95% year-on-year by 2025, as it competes fiercely with Vietnamese automaker VinFast to reshape the electric vehicle landscape in the region.

European share nearly doubles, Chinese brands back on the growth track

Dataforce data shows that Chinese brands hold a total share of 8% in the passenger car markets of the EU, the European Free Trade Association member countries, and the UK, up from just 4.2% during the same period last year.

This growth is built on the foundation of a record performance in 2025. Models such as Chery’s Omoda 5 and Jaecoo 7 have seen increasing visibility across Europe, as Chinese brands attract cost-conscious consumers by expanding their dealer networks and offering significant discounts.

Dataforce analyst Julian Litzinger stated, “Chinese brands are providing attractive products in some previously underserved market segments,” noting that the hybrid vehicle category has particularly strong potential for further growth.

To avoid tariff barriers and further reduce costs, Chinese car manufacturers are accelerating their localization efforts in Europe. Chery has initiated vehicle assembly in Barcelona, Spain, while BYD is rapidly advancing the construction of its factory in Hungary.

Southeast Asia battleground: BYD vs. VinFast for emerging markets

Beyond Europe, Southeast Asia is becoming another significant overseas growth area for Chinese car manufacturers.

BYD’s sales in six major Southeast Asian markets are expected to grow by about 95% year-on-year by 2025, with total deliveries of about 70,000 vehicles; VinFast’s sales are expected to increase by around 90%, selling over 100,000 vehicles combined in markets such as Indonesia, Vietnam, and Thailand. Together, the two companies account for about 7% of the total sales of approximately 2.4 million vehicles in the region, and their rapid rise has significantly impacted the market shares of Japanese brands like Toyota, Honda, and Mitsubishi.

Strategically, BYD leverages its advantages in plug-in hybrid technology and partnerships with ride-hailing platforms like Grab to effectively alleviate consumer concerns regarding insufficient charging infrastructure; VinFast focuses on a low-price strategy and actively invests in charging networks and local manufacturing. BYD has established a production base in Thailand and is advancing new capacity layouts in Indonesia and Cambodia.

In terms of financial strength, the two companies show significant differentiation. BYD remains profitable with ample cash reserves; VinFast, however, is still in a loss situation due to large-scale expansion, relying on funding support from its parent company to maintain its globalization strategy.

Soaring oil prices favor Chinese electric vehicles

Conflicts in the Middle East have led to a sharp rise in oil prices, and the closure of the Strait of Hormuz has exacerbated market concerns about energy supply. Bernstein analysts believe that this situation may provide additional market momentum for Chinese brands by accelerating the adoption of electric vehicles and boosting hybrid demand.

“Among Chinese car manufacturers, we believe BYD will benefit from higher profit margins from overseas electric vehicle sales, as its affordable electric vehicle product line has a clear competitive advantage,” wrote the Bernstein analyst team led by Eunice Lee in a research report.

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