【Text by Observer Net, Xiong Chaoran】On September 9, the 2025 IAA MOBILITY (short for "Munich Motor Show") will be held. In the days leading up to the opening, industry institutions have already described this exhibition as a "struggle between Germany and China for dominance in the electric vehicle sector." On the media day of September 8, the three major German automakers made frequent statements, with content that included references to China.

According to Reuters, Markus Schaefer, Chief Technology Officer of Mercedes-Benz, stated that day that Mercedes-Benz does not need to fear competition from China in the electric vehicle sector, but is working hard to reduce costs in the price war. "We are already among the top in the electric vehicle sector, so we do not need to fear China," he added. He further mentioned that the company is collaborating with its Chinese development team to reduce costs.

Jochen Goller, a board member of BMW Group and head of sales (Goller), said that before the launch of the new iX3 model next year, BMW is closely watching the fierce price war in the competitive Chinese market. However, he refused to disclose the price of the iX3 in China, which will be determined before its launch in China in the first quarter of 2026. "We have seen an incredible price war," Goller said: "Of course, we must consider the current market conditions under the competitive environment."

Oliver Blume, CEO of Volkswagen Group and Porsche Group, told Reuters that Volkswagen does not agree with the "asymmetric" trade agreement reached between the EU and the US, which stipulates a 15% tariff on EU car imports while exempting tariffs on US industrial goods. He said that under the dual pressure of tariffs and a weak Chinese market, Porsche faces far more pressure than any other automaker.

On September 7, 2025, the Mercedes-Benz GLC was unveiled at the world premiere ahead of the Munich Motor Show in Munich, Germany. Visual China

According to reports, Volkswagen is currently engaged in in-depth negotiations with the Trump administration regarding large-scale investments in the United States, the world's second-largest automobile market. So far this year, tariffs have cost this European automaker billions of euros in the U.S. market.

Blume said at the media day of the Munich Motor Show: "Therefore, we hope that our investment plan in the United States will promote local employment and Volkswagen's supply chain." He also added that the negotiations with the U.S. government "are very positive."

Volkswagen is considering large-scale investments to expand its U.S. operations, including building a factory for its Audi brand in the United States, and has been discussing how Washington can provide support.

Blume said he hopes to find a solution quickly, "because we now need to make decisions on how to localize our business."

Reuters reported that facing a 27.5% auto import tariff imposed by the U.S., Volkswagen is striving to alleviate its impact. Blume said that this tariff policy has cost the group billions of euros this year, mainly because its Audi and Porsche brands lack local production facilities.

Like its competitors, Volkswagen is now hoping that the current tariffs will be reduced to 15%, as this is a tariff adjustment measure that the Trump administration has promised to implement.

Every two years, the International Motor Show of Germany, which was previously held in Frankfurt, has been moved to Munich since 2021. The Munich Motor Show is one of the five largest motor shows in the world and one of the largest international motor shows in Europe. Looking back at the previous Munich Motor Show, executives from automakers such as Volkswagen, Renault, and BMW openly stated that in the field of electric vehicles, "China has already taken a generation lead over us," and Europe must strive to catch up in manufacturing costs, ecosystems, and cooperate with China.

On September 6, 2023, in Munich, Germany, the BYD car display at the Munich Motor Show. Visual China

"Chinese hybrid and electric vehicles are strongly entering Munich, entering the European market," on September 1, Bloomberg reported with this title, stating that Chinese automakers are preparing to introduce a series of hybrid and all-electric vehicles for the European market and plan to use the upcoming Munich Motor Show to start a new round of expansion in the region.

Chinese automakers including BYD, XPeng, and Zero will showcase new models at this year's Munich Motor Show, aiming to expand their product lines and continue the achievements gained in recent years, and accelerate their entry into the European market. According to the latest data from Dataforce, a well-known European automotive market analysis institution, Chinese electric vehicles continued to maintain strong momentum in the European market in July, with the share of hybrid vehicles reaching a record high of 9.7%.

As Europe plans to gradually phase out new fuel car sales in the coming decade, the importance of electric and hybrid vehicles is increasingly evident. After performing better in June, Chinese brands accounted for 9.9% of the region's electric vehicle sales in July. According to Dataforce data, the market share of Chinese brands in the entire automotive market has reached 5.3%, breaking through the 5% threshold for three consecutive months.

According to reports, this year's Munich Motor Show coincides with the EU's decision last October, despite Chinese opposition, to end the "anti-subsidy investigation" on China for reasons that are completely unfounded, and to impose a five-year "final anti-subsidy tax" on Chinese electric vehicles, which has led to a continuous escalation of Sino-European trade tensions.

Despite this, Chinese automakers are still maintaining growth, launching more hybrid models and internal combustion engine vehicles that do not trigger tariffs, establishing local sales partnerships, and promising to transfer some production to the region. Now, Chinese automakers are challenging companies such as the Volkswagen Group and Stellantis Group (Stellantis), which are cutting costs to maintain profitability in the sluggish European automotive market.

German media cited information from the German Association of the Automotive Industry (VDA) that, at this year's Munich Motor Show, China is the country with the most exhibitors outside Germany, with 116 exhibitors from China. VDA stated that this year's Munich Motor Show has become the most diverse platform for automakers in history, which is undoubtedly a positive interpretation. The negative interpretation is that even at this German home show, the position of German automakers is declining - this is also the case in the global automotive market.

On September 6, 2023, ahead of the opening of the Munich Motor Show in Munich, Germany. Visual China

German media pointed out that although the growth of Chinese brands in Germany is not significant, it has doubled. But if we look at the entire Europe, the share of Chinese brands has significantly increased. According to the analysis by market research firm Jato Dynamics, the share of Chinese brands in the European market exceeded 5% this year, and this data also includes brands that were not listed separately by the German Association of Vehicle Manufacturers (KBA) due to insufficient new registrations in Germany.

Automotive information platform Inovev concluded that this year's Munich Motor Show will be a "struggle between Germany and China for dominance in the electric vehicle sector." According to official data, the passenger car sales in China this year were 10.9 million units, while in Europe, it was only 6.8 million units. In the new energy vehicle sector, China sold 5.524 million new energy passenger cars this year, more than three times that of Europe (1.782 million).

Previously, Lin Jian, spokesperson for the Chinese Foreign Ministry, pointed out that the popularity of Chinese electric vehicles is due to technological innovation and high-quality products formed in global market competition, not supported by subsidies. At the same time, China has fully eliminated foreign investment access restrictions in the manufacturing sector, always opening the door wide to global automobile companies, allowing all countries' companies to fully enjoy the benefits of China's large market.

Lin Jian emphasized that economic globalization is the trend, protectionism is unacceptable, and the abuse of trade remedy measures violates international trade rules. Only by upholding mutual cooperation can we expand the cake, and only by transcending zero-sum games can we achieve win-win results. Hope the relevant parties listen to the rational voices of the industry, strictly abide by WTO rules, respect market economy laws, stop politicizing and militarizing trade issues, and provide an open, fair, just, and non-discriminatory environment for enterprises from all countries, including Chinese companies, to invest and operate.

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