Author: Botao Xu
“Chinese carmakers going to Europe to make quick money? Dream on — that’s a dead end!”
In Stuttgart, Germany, Jason, a veteran Chinese expert who has worked at Porsche for many years, made this blunt remark to EqualOcean Auto.
Jason is not being alarmist. Having spent decades in Europe — studying, building a career, and raising a family — he has a deep understanding of how Europeans operate. “If a company is counting on short-term profits to stay afloat, it should steer clear of the European market,” he emphasized again.
According to data from the European Automobile Manufacturers' Association (ACEA), in 2024, car sales in Europe — including the EU, the UK, and EFTA countries — reached 12.9636 million units, a modest year-on-year increase of 0.9%. Europe remains the third-largest automotive market in the world, following China and the United States, and is a key destination for Chinese car companies expanding overseas.
However, century-old legacy automakers have long dominated this "sacred land" of the automotive industry.
From Germany’s BBA trio (Mercedes-Benz, BMW, and Audi) to France’s Renault and Peugeot, these brands represent more than just means of transportation to Europeans — they are symbols of culture and history.
For new foreign brands trying to gain a foothold here, it’s akin to snatching food from a tiger's mouth.
So, does this mean Chinese car companies have no chance in Europe?
Not at all.
After an in-depth investigation of the European market, EqualOcean interviewed several seasoned industry experts and uncovered a number of common misconceptions that Chinese automakers hold about Europe. Clarifying these misunderstandings in advance will help Chinese companies better understand the market and craft more effective overseas strategies.
Misconception 1: There Are Too Few Charging Stations in Europe
Many believe that Europe severely lacks electric vehicle charging infrastructure, but this is a serious misconception.
According to EqualOcean, in recent years, Europe has made significant progress in EV charging infrastructure. National governments have boosted investments in charging stations and increased subsidies to accelerate the deployment of charging facilities.
As of 2024, the number of public and semi-public charging stations in Europe has exceeded 900,000, making it one of the most densely equipped regions for EV charging in the world, second only to China and the United States.
From the perspective of charging technology types, the European charging station market is dominated by AC (alternating current) chargers, which account for 84% of the market. DC fast chargers and ultra-fast chargers make up 7% and 10% of the market, respectively, with DC fast chargers showing a higher growth rate. According to EqualOcean, European charging facilities are primarily equipped with Type 2 connectors and Combined Charging Systems (CCS), which meet the diverse charging needs of users.
According to data from the European Automobile Manufacturers' Association (ACEA), in 2024, sales of battery electric vehicles (BEVs) in the EU market reached 1.442 million units. Although this represents a year-on-year decline of 5.9%, such a large volume is entirely supported by Europe’s increasingly robust charging infrastructure.
Therefore, the steadily improving charging infrastructure in the European market offers highly favorable conditions for Chinese new energy vehicles going abroad. Chinese carmakers no longer need to worry about charging anxiety when entering the European market.
Misconception 2: PHEVs Are Energy-Saving, Environmentally Friendly, and Cost-Effective
Most people equate PHEVs with new energy vehicles and believe that in Europe, where charging infrastructure is considered weaker, PHEVs are the best option. This is a significant misconception. In Europe, PHEVs are not regarded as new energy vehicles — they are neither energy-saving nor environmentally friendly, and certainly not cost-effective.
First, the core of PHEVs is still the internal combustion engine, which to some extent runs counter to Europe’s ideals of energy conservation and environmental protection. Second, in Germany’s new car market, about 60%-70% of sales are to corporate customers, and only 30%-40% are private purchases. This means that corporate buyers prioritize government subsidies and tax policies over fuel savings. In other words, for new energy vehicle companies to succeed in Europe, battery electric vehicles (BEVs) are the future.
Dr. Zheng Kang, Dean of the Automotive Technology and Industrial Research Institute at ATTC and a Zhejiang University PhD, has helped numerous car companies enter the European market from the ground up. In his view, the problems with PHEVs lie in their weak brand power, high prices, small market share, and fierce competition.
Zheng shared two stories with EqualOcean — one about a PHEV owner, the other about a BEV owner — which illustrate the stark contrast in their purchase motivations and user experiences.
“We chose a PHEV because we had no other choice.” Eva, a European PHEV owner, smiled bitterly as she recalled her experience. Her household has five members but could only afford one car. That one vehicle had to serve multiple functions: running around the city — where EVs enjoy up to 3 hours of free parking — and taking long family trips during holidays, where fuel becomes necessary.
“When choosing a car, I was really torn,” Eva said. “In Europe, PHEVs are more expensive than both BEVs and internal combustion engine cars, and on long trips, the electricity costs more than fuel. The kids liked the car’s smart features, but my husband and I thought they were just gimmicks — not essential.”
Despite her concerns, Eva still chose the PHEV. “There was no other way — we needed something affordable for city driving that could also handle long trips. The PHEV isn’t perfect, but at least it covers both ends,” she sighed. “In the end, choosing a PHEV was a decision made out of helplessness.”
Eva’s story is not uncommon. When budgets are tight, internal combustion engine vehicles are the first choice for many European households. When the budget allows for a bit more — but not enough to buy two cars — the PHEV becomes a fallback option.
“Driving a BEV is really fun,” said Jim, a European BEV owner, with a smile. Jim’s household has two cars: one gasoline-powered and one fully electric. The gas car is reserved for long-distance travel, while the BEV is his daily commuter.
“Driving an EV in the city is super smooth. Even long-distance trips are okay now — there are fast chargers everywhere on the highways,” he paused, “though I must say, charging on long trips can cost more than gasoline.”
Even so, he couldn’t stop praising the BEV driving experience. “It accelerates quickly, it’s quiet, and the whole feel is just different,” he said, eyes lighting up.
These two seemingly simple stories reflect the complexity and diversity of the European new energy vehicle market. It is worth noting that the core power of PHEVs remains the internal combustion engine, where European automakers still hold a strong lead. Meanwhile, China’s real competitive advantages — such as power batteries and the “three-electric” systems (battery, motor, and electronic control) — are not as prominent in the PHEV segment.
This means that launching PHEVs in the European market may not be a wise choice for Chinese automakers.
According to EqualOcean, the main PHEV (Plug-in Hybrid Electric Vehicle) models available in the European market include the BYD Qin, Tang, Han, and Song series; SAIC Roewe series; and the Lynk & Co PHEV series. On the other hand, mainstream battery electric vehicle (BEV) models in Europe include: Tesla series, NIO, WM Motor, XPeng, Nissan Leaf, BMW i3, BYD e6, e5, Qin EV, Tang EV, BAIC EV and EU series, Chery Arrizo 5e, JAC iEV series, SAIC ERX5, Ei5, E50, and Hyundai’s IONIQ series.
While PHEVs can accommodate various driving scenarios, their relatively high prices and limited smart features make them more like a "transitional product." Moreover, in most Western European countries — such as Germany and France — service areas are already well equipped with fast-charging and even ultra-fast charging stations. This has significantly eased range anxiety and greatly diminished the appeal of PHEVs as an "emergency solution."
In contrast, BEVs have increasingly become the preferred choice for new car buyers, thanks to their eco-friendliness, advanced technology, and the continuous improvement of charging networks. When consumers have sufficient budgets, BEVs are more likely to be their top choice.
In the BEV segment, Chinese automakers have a significant lead over legacy European carmakers, both in cost control and technological capabilities. Therefore, BEVs represent the best opportunity for Chinese car companies to achieve a "dimensionality reduction strike" in the European market.
Misconception 3: PHEVs Combine the Best of Both Worlds — Fuel and Electric
Believing that PHEVs represent the ideal compromise — offering the range of fuel-powered vehicles and the intelligence of electric cars — is yet another major misconception.
“In reality, PHEVs in the European market are more like a compromise made in a tight space — they lack the smart advantages of BEVs and don’t offer the cost-efficiency of fuel cars,” Zheng Kang told EqualOcean Auto, clearly pointing out the awkward position PHEVs occupy.
PHEVs attempt to strike a balance between internal combustion engine (ICE) vehicles and BEVs, but often end up pleasing neither side. For automakers, betting on PHEVs may seem like a safer route, but in Europe, that path is already fraught with challenges.
First, China’s new energy vehicle startups are not particularly good at building ICE engines, which are central to PHEV performance.
Second, the main shortcomings of PHEVs in terms of intelligence are not due to hardware, but rather to poorly optimized software in their smart cockpits. Compared to BEVs, PHEVs often suffer from weak software integration, resulting in compromised user experiences.
For example, although many PHEVs come equipped with large central control screens and voice assistants, the poor adaptation of their software ecosystems leads to slow system performance, low voice recognition accuracy, lagging navigation-car system integration, and unstable OTA (over-the-air) updates.
Tom, a PHEV owner from the UK, complained, “The car interface looks modern, but it feels like a stripped-down version of a Chinese NEV. The voice assistant often fails to understand my Scottish accent, which means I basically have to give up on what should be the most charming feature — voice command.”
This mismatch at the software level makes the smart experience of many PHEVs even worse than that of some diesel or gasoline cars.
In terms of pricing, PHEVs are significantly more expensive than internal combustion engine (ICE) vehicles, yet they do not offer a clear advantage in terms of value for money. Taking the European market as an example, a PHEV typically costs 20%–30% more than a comparable ICE vehicle. However, for many consumers, this extra expense does not translate into a proportional increase in value.
A European consumer named Jerry did the math: “A PHEV only offers about 50 kilometers of pure electric range, which barely covers daily commuting. But as soon as you take a longer trip, you have to switch to fuel. In the end, the operating cost is actually higher than that of a fuel car. So what am I paying extra for?”
This “cost-effectiveness trap” has made many European consumers reluctant to choose PHEVs.
Moreover, in automotive powerhouses like Germany and the UK, the market is already dominated by legacy brands, leaving little room for new entrants. In Germany, for example, domestic brands such as Volkswagen, BMW, and Mercedes-Benz have already rolled out their own PHEV models — and they enjoy clear advantages in price, performance, and brand strength.
For Chinese carmakers entering the market as newcomers, gaining a foothold is tantamount to snatching food from a tiger’s mouth.
“The PHEV market is already saturated. New brands can only compete by slashing prices, but they still can’t beat legacy local automakers in a price war. In the end, they’ll be forced out,” one industry insider told EqualOcean Auto bluntly.
Misconception 4: The European EV Market Is Too Small
The fourth major misconception among Chinese car companies going abroad is that the European EV (pure electric vehicle) market is relatively small — hence the decision to focus instead on PHEVs. In reality, the European EV market is anything but small.
In 2024, EV sales in Europe reached 1.442 million units. Supported by favorable policies, the EV market is continuing to grow. Government support for EVs across European countries goes beyond just purchase subsidies — it also includes tax incentives.
Many companies choose EVs for their commercial fleets in order to benefit from tax breaks, which directly translate into operational profits.
For example, in Germany, companies that purchase EVs can enjoy tax reductions of up to 40%, making EVs an important choice for business fleets.
A European business owner named Jimmy told EqualOcean Auto, “We buy EVs not just for environmental reasons, but also because of the tax benefits. That’s real, tangible profit for the company.”
The same situation applies in the UK. Currently, the majority of EV purchases there — around 70% — are driven by government demand. In the UK, individuals who buy zero-emission vehicles that meet specific criteria (such as a minimum 112 km range and a price under £35,000) can receive a 35% discount, up to a maximum of £2,500.
European consumers’ and businesses’ growing commitment to environmental protection and ESG (Environmental, Social, and Governance) goals has made battery electric vehicles (BEVs) increasingly popular. According to a 2024 market insight survey by McKinsey, more than 38% of European consumers said they would choose a BEV over a fuel-powered vehicle for their next car purchase.
One European EV owner, Sam, shared his rationale: “BEVs are not only environmentally friendly, but also help our company achieve its ESG goals. This benefits our brand image and long-term development.” This alignment between environmental values and ESG objectives is a key factor behind the appeal of BEVs to European consumers.
In addition, BEVs significantly outperform both PHEVs and fuel vehicles in terms of intelligent technology. From smart cockpits and autonomous driving to over-the-air (OTA) updates, BEVs offer clear advantages, allowing European users to experience cutting-edge innovation.
For example, Hyundai’s electric IONIQ series has become highly popular in the German market due to its futuristic design. In terms of sales, it ranks just behind Tesla’s Model Y, Volkswagen, Mercedes-Benz, BMW, and the Tesla Model 3, placing fifth overall.
One European BEV owner told EqualOcean: “Driving a BEV feels like driving the future. Every time I get into the car, I can feel the convenience and joy brought by advanced technology.” This high-tech user experience has made BEVs the top choice for more and more consumers.
“Seeing the right direction is more important than blindly working hard. BEVs are the true way forward; PHEVs are only suitable for niche players,” said Dr. Zheng — a remark that clearly points the way for carmakers.
Based on its field research, EqualOcean believes that Chinese car companies should focus their resources on the development and promotion of BEVs, rather than spreading themselves thin across multiple paths. Diversifying too broadly could lead to high trial-and-error costs and distracted strategic focus.
Therefore, in the European market, BEVs are not only the trend of the future but also better aligned with consumer demand for environmental sustainability and technological sophistication. For Chinese automakers, entering the European market is not a “get-rich-quick” scheme — it is a challenging, long-term endeavor that requires strategic investment and patience.
Europe is not a goldmine waiting to be tapped; it is a proving ground that will test the strength and endurance of Chinese carmakers. Only by truly understanding the uniqueness of the European market and the needs of its consumers can they carve out a place for themselves in this competitive landscape.