Xpeng CEO He Xiaopeng speaks to reporters on the electrical carmaker’s stand on the IAA auto present in Munich, Germany on September 8, 2025.
Arjun Kharpal | CNBC
Germany this week performed host to one of many world’s largest auto exhibits — however within the heartland of Europe’s auto trade, it was buzzy Chinese language electrical automobile firms trying to outshine a number of the area’s largest manufacturers on their dwelling turf.
The IAA Mobility convention in Munich was packed filled with firms with enormous stands displaying off their newest automobiles and expertise. Amongst a number of the largest shows had been these from Chinese language electrical automobile firms, underscoring their ambitions to increase past China.
Europe has turn out to be a focus for the Asian corporations. It is a market the place the standard automakers are seen to be lagging within the improvement of electrical autos, at the same time as they ramp up releases of latest automobiles. On the similar time, Tesla, which was for thus lengthy seen as the electrical car market chief, has seen gross sales decline within the area.
Regardless of Chinese language EV makers dealing with tariffs from the European Union, gamers from the world’s second-largest financial system have responded to the ramping up of competitors by setting aggressive gross sales and enlargement targets.
“The present development of Xpeng globally is quicker than we have now anticipated,” He Xiaopeng, the CEO of Xpeng advised CNBC in an interview this week.
Aggressive enlargement plans
Chinese language carmakers who spoke to CNBC on the IAA present signaled their bold enlargement plans.
Xpeng’s He mentioned in an interview that the corporate is trying to launch its mass-market Mona sequence in Europe subsequent yr. In China, Xpeng’s Mona automobiles begin on the equal of slightly below $17,000. Bringing this to Europe would add some critical worth competitors.
In the meantime, Guangzhou Car Group (GAC) is focusing on speedy development of its gross sales in Europe. Wei Haigang, president of GAC Worldwide, advised CNBC that the corporate goals to promote round 3,000 automobiles in Europe this yr and not less than 50,000 items by 2027. GAC additionally introduced plans to deliver two EVs — the Aion V and Aion UT — to Europe. Leapmotor was additionally in attendance with their very own stand.
There are indicators that Chinese language gamers have made early in roads into Europe. The market share of Chinese language automobile manufacturers in Europe almost doubled within the first half of the yr versus the identical interval in 2024, although it nonetheless stays low at simply over 5%, in keeping with Jato Dynamics.
“The numerous presence of Chinese language electrical car (EV) makers on the IAA Mobility, alerts their rising ambitions and confidence within the European market,” Murtuza Ali, senior analyst at Counterpoint Analysis, advised CNBC.
Tech and devices in focus
Most of the Chinese language automobile corporations have positioned themselves as expertise firms, very like Tesla, and their automobiles spotlight that.
Most of the electrical autos have large screens geared up with flashy interfaces and voice assistants. And in a bid to lure consumers, some firms have included extra devices.
For instance, GAC’s Aion V sported a fridge in addition to a therapeutic massage perform as a part of the seating.
The Aion V is likely one of the automobiles GAC is launching in Europe because it seems to increase its presence within the area. The Aion V is on show on the firm’s stand on the IAA Mobility auto present in Munich, Germany on September 9, 2025.
Arjun Kharpal | CNBC
That is a method that the Chinese language gamers sought to distinguish themselves from legacy manufacturers.
“The probabilities of success for Chinese language automakers are robust, particularly as they’ve an edge when it comes to affordability, battery expertise, and manufacturing scale,” Counterpoint’s Ali mentioned.
Europe’s carmakers push again
Legacy carmakers sought to flex their very own muscular tissues on the IAA with Volskwagen, BMW and Mercedes having among the many largest stands on the present. Mercedes particularly had promoting displayed all throughout the entrance entrance of the occasion.
BMW, just like the Chinese language gamers, had an enormous deal with expertise by speaking up its so-called “superbrain structure,” which replaces {hardware} with a centralized laptop system. BMW, which launched the iX3 on the occasion, and chipmaker Qualcomm additionally introduced assisted driving software program that the 2 firms co-developed.
Volkswagen and French auto agency Renault additionally confirmed off some new electrical automobiles.
Whatever the product blitz, there are nonetheless considerations that European firms usually are not transferring quick sufficient. BMW’s new iX3 relies on the electrical car platform it first debuted two years in the past. In the meantime, Chinese language EV makers have been fast in bringing out and launching newer fashions.
“A dedication to legacy buildings and incrementalism has slowed its capability to construct and leverage a sturdy EV ecosystem, leaving it behind fast paced rivals,” Tammy Madsen, professor of administration on the Leavey Faculty of Enterprise at Santa Clara College, mentioned of BMW.
Whereas European autos have a robust model historical past and their CEOs acknowledged and welcomed the competitors this week in interviews with CNBC, the Chinese language usually are not letting up.
“Europe’s automakers nonetheless maintain vital model worth and legacy. The problem for them lies in attaining manufacturing at scale and adopting new applied sciences sooner,” Counterpoint’s Ali mentioned.
“The Chinese language certainly usually are not ready for anybody to catch-up and are making vital features.”
