MUNICH, Germany- German automakers Volkswagen AG, BMW AG, and Mercedes-Benz Group AG, alongside US-European giant Stellantis NV, have expressed alarm over fierce competition from Chinese electric vehicle (EV) makers like BYD Co Ltd at the Munich auto show, held September 8-14, 2025. The firms unveiled new models while urging the European Union to rethink its 2035 all-electric mandate as they struggle to match Chinese rivals on price and innovation.
Chinese manufacturers, led by BYD, have chinese-electric-vehicles">disrupted the market with affordable, tech-savvy EVs. Last year, BYD overtook Volkswagen as China’s top seller, leveraging in-house battery production to slash costs by up to a third compared to Western competitors. At the Munich show, BYD showcased models like the Dolphin Surf, priced at 20,000 euros, and announced a Hungarian factory opening in late 2025.
Volkswagen CEO Oliver Blume called the EU’s 2035 combustion engine ban “unrealistic” on September 8. “Infrastructure isn’t ready, and hybrids remain vital,” he told reporters. The company plans to launch four budget EVs in 2025, each around 25,000 euros, to regain ground.
BMW CEO Oliver Zipse debuted the iX3 electric SUV, emphasizing local partnerships in China. “Our Neue Klasse platform is more Chinese than ever,” Zipse said, highlighting a 10 billion euro investment to boost range and charging speed. BMW reported a 9.6 percent rise in electrified vehicle sales, reaching 269,000 units in the first half of 2025.
Mercedes-Benz CEO Ola Kallenius introduced the electric GLC SUV, focusing on premium features like Nvidia and Google integration. “Cost-cutting and innovation will keep us ahead,” Kallenius told Reuters. Despite a 23 percent drop in EQ model sales in 2024, Mercedes aims for a rebound with new launches.
Stellantis CEO Carlos Tavares warned of a “major battle” with Chinese rivals. “Tariffs trap us, delaying restructuring,” he said, noting a 29 percent stock drop this year. Stellantis, holding a 21 percent stake in China’s Leapmotor, will sell its EVs in Europe from September.
The EU imposed tariffs up to 35 percent on Chinese EVs in 2024 to shield local manufacturers. However, Chinese brands now claim 8 percent of Europe’s EV market, up sharply from prior years. The global EV sales hit 14 million in 2024, with China dominating at 70 percent and Europe at 16 percent battery electric share.
German automakers are now partnering with Chinese firms to stay competitive. Volkswagen collaborates with Xpeng on software, BMW with Great Wall Motor, and Stellantis with Leapmotor for sub-20,000-euro EVs. Meanwhile, BYD targets 1,000 dealers across 32 countries by year-end, and Xpeng’s G6 SUV undercuts BMW’s iX3 at 47,600 euros in Germany.
The EU’s 2025 CO2 standards and 2035 targets threaten jobs. A Prognos Institute study for the VDA group predicted over 186,000 job losses in Germany by 2035 without policy changes. Blume and Zipse urged flexibility, citing hybrid demand and infrastructure gaps.
Chinese firms develop EVs in two years, half the time of European rivals. BYD’s Stella Li praised their vertical integration for scalability. In contrast, Kallenius emphasized Mercedes’ focus on quality over price wars, with features like ChatGPT integration.
The Munich show, drawing over 800,000 visitors historically, underscored Europe’s automotive pivot. As Chinese competitors expand, German giants face pressure to innovate swiftly or risk losing ground in a market critical to their 13 million jobs.
