[By Guancha Observer Network, Liu Chenghui]

In response to the strong competition from Chinese carmakers, Europe's veteran automakers are starting to follow suit.

"How BYD and its Chinese peers are reshaping the European small electric vehicle market," Hong Kong-based English-language media South China Morning Post reported on June 9, pointing out that as BYD and other Chinese electric vehicle manufacturers move into the European small car market, Volkswagen, Renault, and other European veteran automakers are also preparing to launch a series of low-cost small cars to strengthen their competitiveness. Industry insiders said that Europe has always struggled to produce competitive small cars, and adopting the widely popular lithium iron phosphate battery technology in China will help reduce costs for automakers.

The report noted that BYD, the Chinese automaker that surpassed Tesla last year to become the world's largest electric vehicle manufacturer, launched the compact hatchback Dolphin Surf in Europe last month, with a starting price of €22,990 (approximately RMB 188,500), a range of 322 kilometers; the high-end version priced at €24,990 (approximately RMB 204,900) with a range of 507 kilometers. The promotional event this month reduced the starting price to €19,990 (approximately RMB 163,900).

Maria Grazia DaVino, Managing Director of BYD Europe, stated at the press conference in Berlin that the compact segment is "the next frontier in Europe's electrification" and holds great potential.

Felipe Munoz, Senior Analyst at automotive research firm Jato Dynamics, said: "This is a declaration by BYD to explore the European small car market. This model is highly competitive, and its price may shock the small car market."

On May 21st, in Paris, France, BYD held a press conference for the electric vehicle Dolphin Surf. Visual China.

He added that the release of this model is a great opportunity for European consumers to finally be able to buy cost-effective competitive products. "But it also serves as a wake-up call for European automakers, who have struggled to introduce truly competitive small cars."

The report noted that as automakers strive to meet EU emission regulations, the European electric vehicle market is accelerating this year. According to regulations, this year's new car and van carbon dioxide emissions must decrease by 15% compared to 2021; by 2030, this reduction will increase to 55%. According to data from market research firm Rho Motion, driven by this factor, European electric vehicle sales increased by 22% year-on-year in the first four months of this year.

In addition, it is expected that by 2028 or 2029, the cost of small electric vehicles will equalize with internal combustion engine vehicles, injecting new vitality into the sluggish small car market after the pandemic. Stuart Pearson, Global Automotive Equity Research Director at BNP Paribas, said at a media briefing last month that this trend will unleash new growth potential for electric vehicles.

European consumers favor small electric vehicles both for practical reasons and due to environmental and price considerations. Vincent Piquet, Chief Financial Officer of Ampere, Renault's electric vehicle and software subsidiary, said: "Our cities are ancient, streets narrow, so we need convenient transportation vehicles that are no more than €25,000 (approximately RMB 205,000) and suitable for the European market."

Some Chinese-made models, such as Dacia Spring and Zero Motorcycles T03, sell for less than €20,000 (approximately RMB 164,000) in Europe.

George Whitcombe, a research analyst at Rho Motion, said: "The entry of Chinese original equipment manufacturers (OEMs) has prompted European manufacturers to focus on developing smaller, more affordable electric vehicles."

Dacia Spring at the 2024 Geneva Motor Show. This model is manufactured by a Chinese automaker. Visual China.

In the past six months, European automakers have launched several small electric vehicles, such as Ford Puma Gen-E, Renault 4, and Renault 5. In the next 18 months, Volkswagen ID.2 and Renault Twingo E-Tech will be notable new models to watch.

Japanese and Korean automakers are also introducing smaller, more affordable electric vehicles to the European market. For example, Kia EV2, Nissan Micra, and Hyundai's small electric vehicle are all expected to be available in Europe before the end of 2026.

Although the exact prices of all these models have not been announced, the starting price of many models is expected to be around €25,000.

According to Jato Dynamics' data, small cars accounted for about 20% of new car registrations in Europe in 2024, roughly the same as the previous year.

Matthias Schmidt, an independent European automotive analyst specializing in Chinese brands, said that the small electric vehicle market will continue to expand, with prices further approaching €20,000. He pointed out that adopting the widely popular lithium iron phosphate battery technology in China will help automakers reduce costs.

Whitcombe said that despite tariffs imposed by the EU and the US, Chinese automakers still have stronger pricing capabilities due to lower production costs. He added that companies like BYD also have stronger model lineups, capable of attracting a broader customer base.

However, Whitcombe also noted that as European manufacturers introduce more models targeting the low-cost small electric vehicle market, Chinese manufacturers will face challenges because European domestic brands enjoy strong brand loyalty.

According to Rho Motion's data, BYD's market share in Europe rose from less than 2% in 2024 to 3.4% this year, while Tesla's market share in Europe's electric vehicle market was halved in 2025.

Meanwhile, Chinese companies like BYD and Geely are also making efforts in hybrid electric vehicles and internal combustion engines, partly to avoid tariffs on Made-in-China pure electric vehicles. Rho Motion's data shows that over two-thirds of the vehicles sold by Chinese companies in the first quarter were plug-in hybrids and fuel-powered models, compared to slightly more than 50% a year ago.

Felipe Munoz of Jato Dynamics said: "The size of the pie remains the same, but Chinese enterprises will take market share from traditional automakers."

This article is an exclusive contribution from the Guancha Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7513774028104974882/

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