Western automakers are relocating electric vehicle manufacturing to Europe following the introduction of EU tariffs on Chinese-made EVs, reversing a years-long trend of offshore production. The share of China-built battery electric vehicles sold by western brands in Europe fell from 38 percent in 2024 to 23 percent in the first quarter of 2026, according to research by Transport & Environment based on Globaldata figures. Tesla's China-produced vehicles saw their European market share drop from 23 to 19 percent over the same period.
The shift has lifted domestic output, with German battery EV production rising 15 percent to 1.22 million units in 2025. Chinese manufacturers have responded differently to the duties: BYD and Geely significantly increased their European imports, while SAIC suffered steep declines as its vehicles face tariffs nearly double those applied to competitors.
Meanwhile, ten planned Chinese EV factories in Europe have been announced since the bloc's subsidy investigation began. Chinese brands have also expanded into plug-in hybrids, capturing 13 percent of the EU market, up from 3 percent in 2024.