Even before the European Union targeted imports of cheap Chinese electric vehicles, their makers faced another big challenge: winning over consumers who don’t know or necessarily trust their brands.
At the heart of their strategy is the traditional dealership model that European car makers have been leaving in favour of direct sales.
BYD, Xpeng, Great Wall Motor and others hope dealerships will quickly help them mobilise robust sales and service networks as they try to establish reputations for quality and reliability.
“European consumers have no inkling of Chinese brands,” said Daniel Kirchert, the head of e-mobility consultancy Noyo and former BMW executive who co-founded the now defunct Chinese EV maker Byton.
“It’s a huge challenge for Chinese car makers to make clear to Europeans that their cars are on par with Tesla, at a better price.”
So far, BYD, Nio, Lynk, Xpeng and China’s other home-grown EV makers have barely made a dent. Their share of pure-electric and hybrid cars sold in Europe has risen to 5.6 per cent over the past few years.
The bulk of those deliveries have come from MG Motor, a brand more associated with its British roots than its Chinese ownership.
Whether that proportion stagnates or skyrockets will depend on makers' ability to convince European consumers to stray from household names such as Volkswagen, Renault and BMW that have long-standing track records on safety and performance.
“We believe in the power of car dealers and the service they provide,” Xpeng's Germany manager Markus Schrick said. “They are our face to the customer.”
The dealerships’ customer relations could become even more important as political tensions escalate over the EU’s decision to open an investigation into China’s state support of its EV makers.
If the roughly nine-month probe results in new EU tariffs on Chinese EV imports, it could quickly erode a pillar of their competitiveness.
BYD, China’s biggest car maker, entered Europe via Norway in 2021, and its Atto 3 model became the top-selling EV in Sweden in July.
In Germany, Europe’s biggest auto market, the company only has 15 dealer locations, but it’s targeting 50 in the medium term.
Road trips in an electric car through California – in pictures
BYD will need “considerably more to be represented nationwide”, said Jan Grindemann, chief operating officer of Hedin Electric Mobility, the car maker’s German importer.
To increase brand recognition, BYD has a deal with rental company Sixt to provide 100,000 EVs by 2028 and has already opened 150 stores across Europe.
But to increase its scale, the company is focusing on a distribution network with conventional car dealers.
Great Wall Motor, which is set to produce the new electric Mini Cooper with BMW, has teamed up with Emil Frey, the EU’s largest car dealer group, to distribute its Ora and Wey cars.
Xpeng is following a similar path to sell its P7 sedan and G9 SUV, targeting as many as 20 dealers this year and double that in 2024.
MG, the legacy British brand owned by China’s SAIC Motor since 2009, sold more than 100,000 vehicles in Europe last year and says it currently has more than 800 distribution points at local car dealers across Europe and the UK.
Europe has seen its fair share of new entrants trying to win over buyers. The successful ones, such as Toyota Motor and Hyundai Motor, only slowly crept higher in the ranks and never posed a real threat to Volkswagen’s dominance.
Now, the industry’s paradigm shift to EVs is creating an unprecedented opportunity for newcomers.
Tesla's success has shown that consumers are open to outsiders, though it’s unclear whether Chinese brands will be able to match the marketing draw of Elon Musk.
But with its unmatched control of the battery supply chain, China is well-positioned to expand its share.
Part of the Chinese newcomers’ strategy is to entice buyers with a range of commitment-light ownership options, starting with Lynk & Co’s monthly subscriptions. Dealers, though, remain central.
Because of consolidation in the industry and smaller shops going out of business, the number of car dealers in Germany has fallen to 6,800 in 2020 from nearly three times that in 2000, according to the IfA institute, which monitors auto-industry trends.
The number is expected to almost halve by 2030, as car makers move increasingly towards online sales.
While new potential partners from China could be a boon to struggling dealerships, there are also risks. With so many new EV entrants flooding the market, some are bound to fail, which could leave dealers sitting on unsellable inventory.
Where Chinese upstarts will land in a few years will depend on how things go during the next 24 months, according to Bernstein analyst Daniel Roeska.
Market share could be between 5 per cent and 20 per cent by the end of the decade, and it’s unclear whether they’ll be able to follow Tesla’s path.
“Recreating Tesla’s success will be a challenge,” he said. “But it’s not impossible.”
Four reasons global stock markets are falling right now
There are many factors worrying investors right now and triggering a rush out of stock markets. Here are four of the biggest:
1. Rising US interest rates
The US Federal Reserve has increased interest rates three times this year in a bid to prevent its buoyant economy from overheating. They now stand at between 2 and 2.25 per cent and markets are pencilling in three more rises next year.
Kim Catechis, manager of the Legg Mason Martin Currie Global Emerging Markets Fund, says US inflation is rising and the Fed will continue to raise rates in 2019. “With inflationary pressures growing, an increasing number of corporates are guiding profitability expectations downwards for 2018 and 2019, citing the negative impact of rising costs.”
At the same time as rates are rising, central bankers in the US and Europe have been ending quantitative easing, bringing the era of cheap money to an end.
2. Stronger dollar
High US rates have driven up the value of the dollar and bond yields, and this is putting pressure on emerging market countries that took advantage of low interest rates to run up trillions in dollar-denominated debt. They have also suffered capital outflows as international investors have switched to the US, driving markets lower. Omar Negyal, portfolio manager of the JP Morgan Global Emerging Markets Income Trust, says this looks like a buying opportunity. “Despite short-term volatility we remain positive about long-term prospects and profitability for emerging markets.”
3. Global trade war
Ritu Vohora, investment director at fund manager M&G, says markets fear that US President Donald Trump’s spat with China will escalate into a full-blown global trade war, with both sides suffering. “The US economy is robust enough to absorb higher input costs now, but this may not be the case as tariffs escalate. However, with a host of factors hitting investor sentiment, this is becoming a stock picker’s market.”
4. Eurozone uncertainty
Europe faces two challenges right now in the shape of Brexit and the new populist government in eurozone member Italy.
Chris Beauchamp, chief market analyst at IG, which has offices in Dubai, says the stand-off between between Rome and Brussels threatens to become much more serious. "As with Brexit, neither side appears willing to step back from the edge, threatening more trouble down the line.”
The European economy may also be slowing, Mr Beauchamp warns. “A four-year low in eurozone manufacturing confidence highlights the fact that producers see a bumpy road ahead, with US-EU trade talks remaining a major question-mark for exporters.”
Temple numbers
Expected completion: 2022
Height: 24 meters
Ground floor banquet hall: 370 square metres to accommodate about 750 people
Ground floor multipurpose hall: 92 square metres for up to 200 people
First floor main Prayer Hall: 465 square metres to hold 1,500 people at a time
First floor terrace areas: 2,30 square metres
Temple will be spread over 6,900 square metres
Structure includes two basements, ground and first floor
Vidaamuyarchi
Director: Magizh Thirumeni
Stars: Ajith Kumar, Arjun Sarja, Trisha Krishnan, Regina Cassandra
Rating: 4/5
Results
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Why are asylum seekers being housed in hotels?
The number of asylum applications in the UK has reached a new record high, driven by those illegally entering the country in small boats crossing the English Channel.
A total of 111,084 people applied for asylum in the UK in the year to June 2025, the highest number for any 12-month period since current records began in 2001.
Asylum seekers and their families can be housed in temporary accommodation while their claim is assessed.
The Home Office provides the accommodation, meaning asylum seekers cannot choose where they live.
When there is not enough housing, the Home Office can move people to hotels or large sites like former military bases.
SPECS
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Farage on Muslim Brotherhood
Nigel Farage told Reform's annual conference that the party will proscribe the Muslim Brotherhood if he becomes Prime Minister.
"We will stop dangerous organisations with links to terrorism operating in our country," he said. "Quite why we've been so gutless about this – both Labour and Conservative – I don't know.
“All across the Middle East, countries have banned and proscribed the Muslim Brotherhood as a dangerous organisation. We will do the very same.”
It is 10 years since a ground-breaking report into the Muslim Brotherhood by Sir John Jenkins.
Among the former diplomat's findings was an assessment that “the use of extreme violence in the pursuit of the perfect Islamic society” has “never been institutionally disowned” by the movement.
The prime minister at the time, David Cameron, who commissioned the report, said membership or association with the Muslim Brotherhood was a "possible indicator of extremism" but it would not be banned.
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Engine: 2-litre TSI petrol
Power: 190hp
Torque: 320Nm
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UAE currency: the story behind the money in your pockets
Brief scoreline:
Liverpool 2
Mane 51', Salah 53'
Chelsea 0
Man of the Match: Mohamed Salah (Liverpool)
Brief scores:
Arsenal 4
Xhaka 25', Lacazette 55', Ramsey 79', Aubameyang 83'
Fulham 1
Kamara 69'
