Chinese companies in electric vehicles are fighting for European car manufacturers on their domestic lawn

Germany welcomed one of the largest car shows in the world this week – but in the heart of the European automotive industry, they were buzzing Chinese electric automotive companies that sought to surpass some of the biggest brands in the region on their domestic lawn.

The IAA mobility conference in Munich was filled with companies with huge stands showing their latest cars and technologies. Among some of the largest exhibitions were those of Chinese electric car manufacturers, highlighting their ambitions to develop beyond China.

Europe has become a focal point for Asian companies. It is a market where traditional car manufacturers are considered to be lagging behind in the development of electric vehicles, even if they increase new car versions. At the same time, Teslawhich has been considered so long as the market leader in electric vehicles, has seen sales decrease in the region.

Despite manufacturers of Chinese electric vehicles faced at European Union prices, players in the second world economy responded to the replenishment of competition by setting aggressive sales and expansion objectives.

“Xpeng’s current growth in the world is faster than what we expected,” he said Xiaopng, CEO of Xpeng said CNBC in an interview this week.

Chinese car manufacturers who spoke to CNBC during the IAA show reported their ambitious expansion plans.

He said in an interview with Xpeng that the company was trying to launch its mona-large public series in Europe next year. In China, Xpeng’s Mona cars are starting to equivalent just under $ 17,000. Bringing this in Europe would add serious competition.

Meanwhile, Guangzhou Automobile Group (GAC) aims for rapid growth in sales in Europe. Wei Haigang, president of GAC International, told CNBC that the company was aimed at selling around 3,000 cars in Europe this year and at least 50,000 units by 2027. GAC also announced its intention to bring two electric vehicles – Aion V and Aion UT – in Europe. Leapmotor was also present with their own stand.

There are signs that Chinese players made at the start of the roads in Europe. The market share of Chinese car brands in Europe almost doubled in the first half compared to the same period in 2024, although it is still low at just over 5%, according to Jato Dynamics.

“The significant presence of manufacturers of Chinese electric vehicles (EV) at IAA mobility, reports their growing ambitions and confidence in the European market,” Murtuza Ali, main analyst at Counterpoint Research told CNBC.

Many Chinese automotive companies have positioned themselves as technological companies, just as Tesla, and their cars underline.

Many electric vehicles have large screens equipped with flashy interfaces and vocal assistants. And in order to attract buyers, some companies have included additional gadgets.

For example, Aion V of GAC sported a refrigerator as well as a massage function as part of the seats.

This is a way in which Chinese players have sought to differentiate themselves from inherited brands.

“The chances of success for Chinese car manufacturers are strong, especially since they have an advantage in terms of accessibility, battery technology and production scale,” said Ali de Counterpoint.

The inherited manufacturers sought to flex their own muscles at IAA with VolkwagenBMW and Mercedes with among the largest stands in the show. Mercedes in particular had an advertisement displayed throughout the entry before the event.

BMW, like Chinese players, has focused strongly on technology by talking about its so-called “superbrain architecture”, which replaces the equipment with a centralized computer system. BMW, which introduced the IX3 during the event, and the manufacturer of Qualcomm chips also announced assisted driving software that the two companies co-developed.

Volkswagen and the French automotive firm Renault have also shown new electric cars.

Regardless of the Blitz product, it is still feared that European companies will not move quickly enough. The new BMW IX3 is based on the electric vehicle platform that he made his debut two years ago. Meanwhile, manufacturers of Chinese electric vehicles quickly highlighted and launched new models.

“A commitment to inherited structures and incrementalism has slowed down its ability to build and take advantage of a robust EV ecosystem, leaving it behind rapidly evolving rivals,” said Tammy Madsen, professor of management at the Leavey School of Business of the University of Santa Clara, about BMW.

While European cars have a strong history of the brand and their CEOs recognized and welcomed the competition this week in interviews with CNBC, the Chinese are not released.

“European car manufacturers always have important value and inheritance of the brand. The challenge for them lies in the realization of large -scale production and the adoption of new technologies faster,” said Ali de Counterpoint.

“The Chinese surely expects no one to catch up and make significant gains.”