(Bloomberg) — Chinese automakers grabbed another record share of Europe’s car market last month, luring buyers still wary about going fully electric with more affordable hybrid vehicles.
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Brands including BYD Co. made up nearly 12% of total new-car sales in the region in August, according to Dataforce. They accounted for one in four sales of all hybrids — or one in three for hybrids with a plug — as they cash in on models that aren’t subject to steep European Union tariffs.
The data show how China’s carmakers are capitalizing on lingering consumer concern around charging networks and driving range, with hybrids acting as a stepping-stone to going fully electric. Still, surging fuel prices are piling pressure on the finances of combustion-engine car owners.
Demand for battery and hybrid cars jumped 27% in August, according to Dataforce, to offset declines for vehicles that only run on fuel. Thanks to EV gains, the overall market rose 4.6%.
Chinese hybrid vehicles don’t currently face the same steep European Union tariffs as electric-vehicle imports from the country, though they may soon be hit with similar duties, Handelsblatt has reported. Germany is preparing a package of economic security measures that may include new tariffs on hybrids which it plans to present to the EU, Bloomberg reported this month.
In the UK, Chinese carmakers don’t face the additional tariffs on EVs currently in place in the EU. There, more than one in five new cars is Chinese, with brands like Chery Automobile Co.’s Jaecoo proving a hit with consumers.
While volumes aren’t as high in Germany, Chinese companies are also gaining ground in Europe’s largest car market, picking up a 6.4% market share there in August, according to Dataforce.
“Even if their market share is comparably low to other markets, the sheer size of the German market makes that move however very attractive,” said Dataforce analyst Julian Litzinger.
Across Europe, EV sales are climbing, in part due to the return of incentives in countries like Germany. That’s taking a toll on some European manufacturers because those models tend to have lower margins. Volkswagen AG last week said the uplift is weighing on profitability, particularly at the Volkswagen passenger-car and Audi brands.