What's happened
Chinese EV manufacturers BYD, Xpeng, and Leapmotor are unveiling new models at IAA Mobility 2025, expanding their presence in Europe despite tariffs and trade tensions. Meanwhile, Tesla's market share in the US continues to decline as competitors gain ground through aggressive pricing and new offerings.
What's behind the headline?
Chinese EV firms are aggressively expanding into Europe, leveraging tariffs and trade barriers to establish local manufacturing and partnerships, such as BYD's factories in Hungary and Turkey. Their focus on hybrid and affordable EV models is resonating with European consumers, especially as the region moves toward phasing out combustion engines. This expansion is likely to intensify competition, pressuring European automakers to innovate and cut costs.
In the US, Tesla's market share has fallen below 40% for the first time since 2017, amid rising competition from traditional automakers and new EV entrants offering attractive incentives. Tesla's shift toward robotaxis and AI-driven projects, along with delays in cheaper models, has impacted its auto sales. The company's valuation remains heavily tied to future projects, but near-term sales growth is slowing.
The contrasting strategies highlight a global shift: Chinese firms are expanding aggressively in Europe and other markets, while Tesla is focusing on high-tech ventures and new product lines, risking short-term sales declines. The US market's near-term volatility suggests Tesla's dominance will continue to erode unless it reverts to more competitive pricing and product offerings.
Overall, the industry is entering a phase of intense competition, with Chinese firms gaining ground in Europe and Tesla facing headwinds in the US. The next year will determine whether Tesla can regain market share or if Chinese brands will solidify their global presence, especially as they continue to innovate and localize production.
What the papers say
The South China Morning Post reports that Chinese EV makers like BYD, Xpeng, and Leapmotor are expanding their European footprint through new models and local factories, despite tariffs and trade tensions. The article highlights BYD's recent success in Europe, outselling Tesla in some markets, and details their strategy of building factories in Hungary and Turkey to avoid EU tariffs.
Meanwhile, Bloomberg emphasizes the challenges Tesla faces in the US, with its market share dropping below 40% for the first time since 2017, amid rising competition and delays in launching cheaper models. The article notes Tesla's focus on AI projects and robotaxis, which may be diverting attention from core auto sales.
The NY Post adds that US EV sales growth slowed in August, with Tesla's share declining further, while other automakers ramp up incentives. The article underscores the impact of federal tax credits ending and increased incentives from competitors, which are eroding Tesla's dominance.
Together, these sources illustrate a shifting landscape: Chinese EV firms are expanding globally, especially in Europe, while Tesla's US market share diminishes as competitors leverage incentives and local manufacturing. The strategic divergence suggests a future where Chinese brands could challenge Tesla's global leadership, especially if Tesla's focus on high-tech ventures does not translate into immediate sales growth.
How we got here
China's EV industry has grown rapidly since government subsidies began in 2016, fostering a competitive landscape with both domestic and international players. Tesla's entry into China and local production at Shanghai helped establish its early dominance, but rising competition from Chinese brands and regulatory pressures have challenged its market share. Meanwhile, Chinese EV firms are expanding globally, especially in Europe, where tariffs and trade tensions have prompted local partnerships and factory investments.
Go deeper
Common question
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Why Is Tesla Losing Market Share and What’s Next for EVs?
Tesla's recent decline in US market share has raised questions about its future dominance in the EV industry. As competitors ramp up incentives and new models enter the market, many wonder what’s behind Tesla’s struggles and what it means for investors and consumers. In this page, we explore the reasons behind Tesla’s market shift, the rise of Chinese EV manufacturers, and what the future holds for electric vehicles and the economy.
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Why Are Chinese EV Companies Expanding Globally?
Chinese electric vehicle (EV) manufacturers are making significant moves beyond their domestic market, especially into Europe. This expansion raises questions about what’s driving their growth, how they’re competing with established brands like Tesla, and what challenges they face abroad. In this page, we explore the reasons behind their international push and what it means for the global EV industry.
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What’s Next for Stocks, Inflation, and Global Trade?
As markets navigate a complex economic landscape, investors and analysts are asking: what are the key indicators now, and what could the future hold? From US stock resilience amid inflation fears to Chinese EV expansion, understanding these trends can help you make smarter decisions. Below, we explore the most pressing questions about market trends, inflation impacts, and global trade developments.
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Tesla, Inc. is an American electric vehicle and clean energy company based in Palo Alto, California. The company specializes in electric vehicle manufacturing, battery energy storage from home to grid scale and, through its acquisition of SolarCity, solar
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BYD Company Limited or BYD is a publicly listed Chinese multinational manufacturing conglomerate headquartered in Shenzhen, Guangdong, China.
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Guangzhou Xiaopeng Motors Technology Co., Ltd., trading as XPeng Motors (Chinese: 小鹏汽车; pinyin: Xiǎopéng Qìchē), commonly known as XPeng, is a Chinese electric vehicle manufacturer. The company is headquartered in Guangzhou, Guangdong, with of
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Volkswagen, shortened to VW, is a German automaker founded in 1937 by the German Labour Front, known for the iconic Beetle and headquartered in Wolfsburg.
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Leapmotor is a Chinese automobile manufacturer headquartered in Hangzhou, China, specializing in developing electric vehicles.
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China, officially the People's Republic of China, is a country in East Asia. It is the world's most populous country, with a population of around 1.4 billion in 2019.