New forces enter europe in earnest

Li Auto is accelerating its pace of entering the European market. Recently, Li Auto officially joined the China Chamber of Commerce in the European Union as a member and became part of the chamber's Automotive Working Group.

Coincidentally, over the past few years, most Chinese EV startups have expanded their operations into multiple countries. Focusing on the European market, nearly all new entrants of a certain scale—except for Xiaomi Auto—have already established varying levels of presence there, ranging from initial sales trials and channel development to deeper localization efforts, each moving at its own pace but all heading in the same direction.

Who is faster and who is slower?

In the "who's faster and who's slower" review, Xpeng and NIO are undoubtedly in the first tier.

NIO entered Europe in 2021 by establishing Norway as its beachhead, leveraging the country's high EV adoption rate and favorable policy environment to open its first overseas NIO House and deploy battery swap stations. In the following years, NIO gradually expanded its footprint to core European markets including Germany, the Netherlands, and Sweden.

In 2025, NIO will further expand into markets including Portugal, Greece, Bulgaria, Austria, and Hungary, and plans to complete deliveries to the Czech Republic, Poland, and Romania by 2026. To date, NIO’s presence in Europe spans over ten countries.

Xpeng Motors has maintained a similarly brisk pace. In 2021, Xpeng shipped its first batch of vehicles to Europe, becoming one of the earliest Chinese EV startups to enter the European market. In the following years, Xpeng steadily expanded into Northern and Central Europe. By 2025, Xpeng's overseas sales reached 45,000 units, a 96% year-over-year increase, with the European market contributing significantly.

In Germany—a traditional stronghold of internal combustion engine vehicles—XPeng is attempting to challenge the entrenched dominance of BMW, Mercedes-Benz, and Audi (BBA) with the intelligent features of models such as the P7 and G9. By 2026, XPeng will launch at least four new vehicles in overseas markets.

Leapmotor is a typical example of a latecomer that has risen to prominence. By establishing Leapmotor International, a joint venture with Stellantis Group, Leapmotor has leveraged Stellantis’ extensive sales network across Europe to enter more than ten European countries in a short period. Currently, Leapmotor’s overseas sales network comprises 800 outlets, covering 35 markets. In 2025, Leapmotor’s annual export volume to Europe reached 39,000 units, ranking it among the top ten Chinese passenger vehicle brands exporting to Europe.

Backed by Geely Group, Zeekr has also been aggressively expanding. It first entered Europe in August 2023 and opened its first European store in Stockholm in November of the same year, commencing deliveries.

After more than two years of exploration, Zeekr is accelerating its expansion -- aiming to enter the markets of Germany, France, Spain, and Italy by 2026, and planning to enter the UK market later in 2026 or early 2027. Currently, Zeekr's market share in Sweden's electric vehicle market has reached 2%, equivalent to an annual sales volume of about 1,400 units.

And it was not until 2025 that Li Xiang once again established globalization as a core strategy and set up an overseas market expansion department. In January 2025, it established a research and development center in Germany, assembling a professional team covering multiple fields such as design, power semiconductors, and chassis systems. It was only in the fourth quarter of last year that Li Xiang opened its first overseas store.

Image source: Li Auto

Entering 2026, multiple new-energy vehicle startups are accelerating their overseas expansion, with Europe as a key focus region. Lu Fang, Chairman of Voyah, stated that the company will concentrate on the European and Middle Eastern markets in 2026. Li Auto’s recent membership in the EU-China Chamber of Commerce also signals an acceleration of its European expansion.

New energy vehicle brands are rushing to enter Europe, and the reasons are straightforward. Europe is the birthplace of the global automotive industry and the largest new energy vehicle consumer market outside of China, with local consumers showing a higher acceptance of high-end intelligent electric brands.

Compared to China, Europe has a more flexible pricing space — the Zeekr is priced as high as over 70,000 euros in Italy, and the prices of NIO and XPeng vehicles in Europe are generally higher than in China. Some believe that Chinese automakers can achieve higher profit margins when selling pure electric and plug-in hybrid vehicles in Europe, while the production costs in China are 20% to 30% lower than in Europe.

However, the window of opportunity is narrowing. Traditional European automakers are accelerating their transition to electric vehicles, with local companies such as Volkswagen, Mercedes-Benz, and BMW also speeding up their layout in new energy. The European Automobile Manufacturers' Association members have committed to investing over 250 billion euros for green transformation by 2030.

Kurt Bachmaier, Magna’s Global Vice President of Sales and Marketing for its Complete Vehicle Business, stated plainly, “The window of competitive opportunity is rapidly closing. Whoever secures a foothold in the European market first will be better positioned to claim an advantageous spot in the new landscape.” This is also a key reason why Chinese EV startups are accelerating their expansion.

Route selection has already differed.

New entrants are advancing into Europe, adopting diverse strategic approaches. This diversity stems both from differences in each brand's inherent resources and capabilities and from their varying assessments of market entry barriers and consumer demands in Europe.

Leapmotor has adopted a “borrowing the boat to sail overseas” strategy. Leveraging its joint venture framework with Leapmotor International, Leapmotor has directly integrated into Stellantis’ mature global system, bypassing the lengthy cycle that new brands typically face when building a presence overseas from scratch and achieving rapid market penetration.

In terms of product development, Zeekr has collaborated with the Maserati team under Stellantis Group to tune the chassis of the Zeekr B10, adopting a "global standard + local optimization" dual approach to meet the preferences of European consumers. Meanwhile, leveraging Stellantis' factories in Europe for localized production, which also effectively mitigates certain tariff pressures.

Image source: XPeng Motors

NIO’s approach, however, is distinct. Rather than simply exporting products, NIO has introduced its battery-swapping network, direct-sales system, and service model as an integrated package to Europe. For instance, NIO has built an energy factory in Hungary dedicated to the manufacturing and maintenance of battery-swap stations, with a total investment of approximately €14 million.

The road has not been easy — the administrative efficiency of European countries is far below expectations, and building a charging station often takes ten months or even a year. NIO's chairman Li Bin later admitted that this decision was "not very ideal."

But in the long run, the heavy asset strategy is gradually showing differentiated value. In Denmark, each battery swap station participating in grid frequency regulation can generate tens of thousands of euros in annual income. In 2025, its battery swap stations in Sweden have been approved to connect to the local grid frequency regulation system.

The head of NIO's energy business in Europe pointed out that this approval is a breakthrough for NIO and the entire industry. Once the network scale is formed, the alternative costs and entry barriers will be much higher than those of a single product export model. NIO's battery swap network will thus transition from a pure user service facility to an energy storage asset capable of participating in electricity market transactions.

Source: NIO Automobile

Zeekr, leveraging resources from Geely Holding Group and drawing on sales channel development experience from Volvo and Lynk & Co., has entered the European market. It has established a global design center and a European engineering R&D team in Gothenburg, comprising over 1,500 engineers and designers to ensure products meet European users’ preferences in aesthetics, handling, and safety standards from the outset of development.

In terms of channels, Zeekr adopts localized strategies. According to multiple sources, it primarily uses a direct-sales model to establish its brand image in markets like Sweden and the Netherlands; partners with dealers in Belgium, Denmark, and Norway; collaborates with private importers in smaller markets such as Bulgaria, Croatia, and Greece; and has established a local sales company in France.

What are the prospects?

After the initial positioning, a more critical issue arises: how much time remains for the European market, and how will the choice of technology roadmaps affect the competitive landscape?

From market data, Chinese brands’ development in Europe has evolved from quantitative growth to qualitative improvement. In December 2025, Chinese automakers achieved a record monthly sales volume of over 100,000 units in Europe, representing a 127% year-on-year increase, and their market share rose to 9.5%.

Market research firm Dataforce analysts stated bluntly, "We are astonished by how quickly Chinese cars are gaining popularity in southern European markets." For instance, in Spain, Chinese brands have captured more than 10% of the electric vehicle market share.

In terms of technology pathways, the European market is exhibiting a differentiated boom. In 2025, the European market’s total sales reached 13.3 million units, an increase of 2.3% year-on-year, with battery electric vehicle (BEV) sales rising by 30% and plug-in hybrid electric vehicle (PHEV) sales increasing by 34%.

This represents a structural advantage for emerging automakers and most Chinese brands. Professor Han Zhiyu of Tongji University told Gasgoo that the multiple hybrid architectures independently developed by Chinese automakers are technologically advanced, and their highly integrated designs not only optimize powertrain performance but also offer cost-control advantages.

Image source: Zeekr

Since Europe's charging infrastructure is still underdeveloped and consumers are price-sensitive toward pure electric vehicles, range-extended models may have even greater market potential in Europe than pure electric ones. Han Zhiyu pointed out that European local automakers need to shift to hybrid and range-extended models, which can be implemented much faster than plug-in hybrids, as they have already established pure electric platforms, and range-extended models can be more easily integrated with pure electric platforms.

For example, BMW has restarted development of the sixth-generation X5 range-extended version. Meanwhile, local automakers such as Volkswagen and Renault are accelerating the rollout of plug-in hybrid models. For Li Auto, its extensive experience in product definition and user operations in the range-extended segment constitutes a core asset for entering the European market.

Li Liguo, Vice President of Ideal Motors for Electric, once said, "Range-extended vehicles also have a big market in Europe, it's just that there are currently not enough competitive products." If the brand positioning targeting Chinese family users can be successfully transferred to Europe, combined with local product adaptation and service system construction, Ideal still has the opportunity to find an entry point in a niche market.

In the software ecosystem, Gaode's AutoSDK International Edition uses a "Lego"-style modular architecture, covering more than 170 countries and regions across Europe, Southeast Asia, and the Middle East, supporting 19 major global languages, and can make up for the shortcomings of Chinese automakers in in-vehicle navigation experience abroad.

At the same time, Chinese supplier companies such as Desay SV and CATL have already entered Europe in advance, achieving local production. This industrial chain collaboration going overseas provides critical external support for Chinese new force companies' competition in electrification and intelligence.

Image source: NIO Automobile

At the policy level, although tariff pressures on electric vehicles exist, the situation is gradually improving. In October 2024, the European Union imposed anti-subsidy duties of up to 35.3% on Chinese-made battery electric vehicles, adding to the existing 10% base tariff, resulting in a combined tariff rate exceeding 45% for some automakers.

However, in January 2026, China and the EU made significant progress in consultations on the anti-subsidy case for electric vehicles, and a "price commitment" mechanism is being considered as an alternative to high tariffs. This has boosted market confidence. At the same time, the EU has adjusted its 100% zero-emission target to a 90% reduction from 2021 levels, which still leaves room for the sale of plug-in hybrid vehicles.

Specifically, Germany plans to restart a 3 billion euro electric vehicle subsidy policy, open to all automakers. Cui Dongshu, secretary-general of the China Passenger Car Association, expects that as automakers adapt to the new rules of the price commitment mechanism, combined with the release of local production capacity and improved product competitiveness, the sales of Chinese electric vehicles in the EU market will gradually recover. He expects that from 2026 to 2028, the annual growth rate of Chinese electric vehicle exports to the EU will remain around 20%.

Some analysts note that, compared to comprehensive automakers like Geely and BYD, new energy vehicle startups remain "niche brands" in Europe, with limited but not nonexistent opportunities. They believe niche brands going overseas can leverage local partners and domestic manufacturing resources, and that signs of success for around three such brands could emerge in regions like the Middle East.

However, challenges are equally formidable. European domestic automakers are accelerating their electrification transitions, and as they integrate their supply chains and enhance their software capabilities, they will gradually narrow the technological window for Chinese brands. Meanwhile, foreign consumers currently perceive Chinese new-energy vehicle startups primarily as “Chinese cars,” with brand recognition still hovering at an average expectation level. To transition from niche to mainstream, sustained and long-term investments in product capability, service experience, and brand building remain essential.

It is important to understand that true localization encompasses not only market entry but also long-term operations, employee cultural recognition, shaping of corporate values, supply chain management, and win-win cooperation with the local ecosystem.