Chinese EV makers surge 465% as Europe auto sales rise 3.6%

Chinese electric-vehicle makers more than doubled their European sales in May, with Leapmotor surging 465%, as the region's total car market grew 3.6% to 1.15 million units, ACEA data showed.

"The market continued to benefit from strong consumer demand for a range of electrified technologies across key European markets, sustained by new and revised tax benefits and incentive schemes," the European Automobile Manufacturers' Association said in a statement.

Battery-electric vehicle registrations jumped 39.1% in May, while plug-in hybrids rose 13.2% and conventional hybrids gained 8.2%. Combined, electrified vehicles accounted for more than two-thirds of all new registrations. Petrol and diesel sales each fell about 19%, accelerating the decline of internal combustion engines.

The divergence between surging Chinese brands and declining European legacy automakers signals a structural shift in the region's auto market. Renault, Stellantis and Volkswagen each saw registrations slip 1% to 3%, ceding ground to Chinese rivals that offer more affordable electric models as inflation begins to pressure household budgets.

Leapmotor's May sales jumped 465.1% from a year earlier, while Chery rose 244.1% and BYD gained 136.6%, according to ACEA data covering the European Union, Britain, Iceland, Liechtenstein, Norway and Switzerland. Geely and SAIC posted more modest gains of 12.6% and 13.9%, respectively.

Tesla extended its recovery for a fourth consecutive month, with registrations more than doubling to 28,610 units across the region. In the EU alone, Tesla sold 21,767 vehicles, also more than double from a year earlier. The rebound follows more than a year of declines as the company dealt with customer backlash linked to Elon Musk's involvement with the Trump administration and intensifying competition from Chinese rivals.

BYD's European registrations reached 32,380 units in May, surpassing Tesla's total and showing the rapid expansion of Chinese brands in the region. Leapmotor, in which Stellantis holds a 51% stake through a joint venture, registered 9,945 vehicles — a nearly sixfold increase from a year ago.

The shift toward electrified vehicles is reshaping Europe's auto market. Traditional automakers that dominated the combustion-engine era are losing ground as consumers gravitate toward more affordable electric models from Chinese manufacturers. The trend is likely to accelerate as new tariff policies and incentive schemes take effect across the bloc.

For investors, the data points to a continued re-rating of the global EV sector. BYD, trading on the Hong Kong exchange, and Leapmotor are gaining European market share at the expense of Stellantis, Renault and Volkswagen. Tesla's recovery in Europe, while significant, faces headwinds from both Chinese competition and regulatory uncertainty around its full self-driving technology, which received Dutch approval in April and has since been recognized by four other EU countries.

This article is for informational purposes only and does not constitute investment advice.