Xpeng CEO He Xiaopeng speaks to reporters at the electric carmaker’s stand at the IAA auto show in Munich, Germany on September 8, 2025.

Arjun Kharpal | CNBC

Germany this week played host to one of the world’s biggest auto shows — but in the heartland of Europe’s auto industry, it was buzzy Chinese electric car companies looking to outshine some of the region’s biggest brands on their home turf.

The IAA Mobility conference in Munich was packed full of companies with huge stands showing off their latest cars and technology. Among some of the biggest displays were those from Chinese electric car companies, underscoring their ambitions to expand beyond China.

Europe has become a focal point for the Asian firms. It’s a market where the traditional automakers are seen to be lagging in the development of electric vehicles, even as they ramp up releases of new cars. At the same time, Tesla, which was for so long seen as the electric vehicle market leader, has seen sales decline in the region.

Despite Chinese EV makers facing tariffs from the European Union, players from the world’s second-largest economy have responded to the ramping up of competition by setting aggressive sales and expansion targets.

“The current growth of Xpeng globally is faster than we have expected,” He Xiaopeng, the CEO of Xpeng told CNBC in an interview this week.

Aggressive expansion plans

Chinese carmakers who spoke to CNBC at the IAA show signaled their ambitious expansion plans.

Xpeng’s He said in an interview that the company is looking to launch its mass-market Mona series in Europe next year. In China, Xpeng’s Mona cars start at the equivalent of just under $17,000. Bringing this to Europe would add some serious price competition.

Meanwhile, Guangzhou Automobile Group (GAC) is targeting rapid growth of its sales in Europe. Wei Haigang, president of GAC International, told CNBC that the company aims to sell around 3,000 cars in Europe this year and at least 50,000 units by 2027. GAC also announced plans to bring two EVs — the Aion V and Aion UT — to Europe. Leapmotor was also in attendance with their own stand.

There are signs that Chinese players have made early in roads into Europe. The market share of Chinese car brands in Europe nearly doubled in the first half of the year versus the same period in 2024, though it still remains low at just over 5%, according to Jato Dynamics.

“The significant presence of Chinese electric vehicle (EV) makers at the IAA Mobility, signals their growing ambitions and confidence in the European market,” Murtuza Ali, senior analyst at Counterpoint Research, told CNBC.

Tech and gadgets in focus

Many of the Chinese car firms have positioned themselves as technology companies, much like Tesla, and their cars highlight that.

Many of the electric vehicles have big screens equipped with flashy interfaces and voice assistants. And in a bid to lure buyers, some companies have included additional gadgets.

For example, GAC’s Aion V sported a refrigerator as well as a massage function as part of the seating.

The Aion V is one of the cars GAC is launching in Europe as it looks to expand its presence in the region. The Aion V is on display at the company’s stand at the IAA Mobility auto show in Munich, Germany on September 9, 2025.

Arjun Kharpal | CNBC

This is one way that the Chinese players sought to differentiate themselves from legacy brands.

“The chances of success for Chinese automakers are strong, especially as they have an edge in terms of affordability, battery technology, and production scale,” Counterpoint’s Ali said.

Europe’s carmakers push back

Legacy carmakers sought to flex their own muscles at the IAA with Volskwagen, BMW and Mercedes having among the biggest stands at the show. Mercedes in particular had advertising displayed all across the front entrance of the event.

BMW, like the Chinese players, had a big focus on technology by talking up its so-called “superbrain architecture,” which replaces hardware with a centralized computer system. BMW, which introduced the iX3 at the event, and chipmaker Qualcomm also announced assisted driving software that the two companies co-developed.

Volkswagen and French auto firm Renault also showed off some new electric cars.

Regardless of the product blitz, there are still concerns that European companies are not moving fast enough. BMW’s new iX3 is based on the electric vehicle platform it first debuted two years ago. Meanwhile, Chinese EV makers have been quick in bringing out and launching newer models.

“A commitment to legacy structures and incrementalism has slowed its ability to build and leverage a robust EV ecosystem, leaving it behind fast moving rivals,” Tammy Madsen, professor of management at the Leavey School of Business at Santa Clara University, said of BMW.

While European autos have a strong brand history and their CEOs acknowledged and welcomed the competition this week in interviews with CNBC, the Chinese are not letting up.

“Europe’s automakers still hold significant brand value and legacy. The challenge for them lies in achieving production at scale and adopting new technologies faster,” Counterpoint’s Ali said.

“The Chinese surely are not waiting for anyone to catch-up and are making significant gains.”

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An aerial view of a cargo ship being loaded with shipping containers at the Port of Baltimore in Baltimore, Maryland, on August 7, 2025.

Jim Watson | Afp | Getty Images

Postal carriers across Europe are planning to suspend some shipments to the U.S. as the nations prepare for the end of a longstanding trade rule.

Certain shipments from Germany, Spain, France, Belgium, Sweden, Denmark, Finland, Norway and Switzerland are due to be paused in the coming days and weeks after President Donald Trump signed an executive order ending the century-old “de minimis” exemption.

The trade policy, sometimes referred to as a “loophole,” has allowed shipments valued under $800 to enter the U.S. virtually duty-free. The practice is set to end for imports from around the globe on Friday following Trump’s executive order.

The de minimis exemption for goods coming from China and Hong Kong, which have long accounted for the bulk of those shipments, ended in May.

The suspensions will impact shipments valued under $800, and largely exclude gifts and letters. Most of the countries said they have to pause shipments because their systems weren’t built for the new requirements and they’re unsure how to properly process the shipments under the new rules.

In a Friday statement, German-based international shipping company DHL said Deutsche Post and DHL Parcel Germany will no longer be able to accept and transport parcels destined for the U.S. It said “key questions remain unresolved, particularly regarding how and by whom customs duties will be collected in the future, what additional data will be required, and how the data transmission to the U.S. Customs and Border Protection will be carried out.”

Customers will still be able to ship goods via DHL Express, which is more expensive.

National post offices in Spain, France and Belgium issued similar notices.

In a news release, Spain’s national post office Correos said it learned of the detailed requirements necessary to comply with the executive order on Aug. 15 and hasn’t had enough time to change its systems. 

“This situation forces Correos, along with all postal operators that manage shipments destined for the United States, to substantially modify their processes and increase shipment controls to implement the new customs requirements, significantly impacting international postal logistics and e-commerce flows,” Correos said, adding the suspension took effect on Monday.

It said it is working to resume the shipments “as quickly as possible.”

Belgium’s post office said it was suspending shipments beginning on Saturday while France’s La Poste said shipments would be suspended beginning on Monday. 

Meanwhile, Finland’s post office Posti stopped accepting goods bound for the U.S. on Saturday but later added it could no longer accept gifts or letters either because “several airlines have now refused to transport any postal items to the United States.” 

The carriers said they expect the suspensions to be temporary. The pauses could delay some shipments, but are not expected to affect most international commerce.

Larger retailers, both domestic and international, don’t tend to use the de minimis exemption that often because they ship their goods via containers to U.S. warehouses and pay tariffs on the goods. Two major exceptions are Temu and Shein, which popularized the use of de minimis and relied on it for the bulk of their shipments to U.S. consumers. Since de minimis ended for goods shipped from China, demand has fallen for Shein and Temu as prices have risen.

The suspended shipments are expected to impact smaller orders from Americans who are shopping from smaller European businesses directly.

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Superyachts in Port Hercules, Monaco.

John Lamb | The Image Bank | Getty Images

A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox.

American boat buyers and European shipyards are scrambling to assess the damage from the proposed U.S. 15% tariffs on European-made goods.

With many of the world’s recreational boats and yachts made in Europe, and most of the biggest buyers in the U.S., industry experts are bracing for the fallout from President Donald Trump’s Monday tariff announcement.

The European Boating Industry issued a statement this week saying, “The U.S. is the most important export market for the recreational boating industry in Europe. The 15% tariff rate presents serious challenges for businesses in Europe.”

Granted, most Americans can who buy a $10 million or $100 million yacht can likely afford another 15% tax. Yet brokers said the cost equation for many buyers will change with the tariffs.

“I don’t know any stupid rich people,” said Kevin Merrigan, chairman of Northrop & Johnson, the yacht brokerage firm. “What matters to them matters. If they hear they’re going to have to spend another 15%, it has an impact.”

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Most boat contracts require the builder to pay duties. Yet attorneys said the new tariffs aren’t likely to fall under existing duties, and the buyers will likely have to pay a portion, if not the majority. Brokers said many buyers who purchased their yachts a year or two ago — since a specialized build can take three years from start to finish —are negotiating now with the shipyards.

In the meantime, brokers said the wealthy will do what they typically do when faced with a new tax — find a way around it. The most common strategy will likely be to register the boat in another country, known as “foreign flagging.”

An American buyer can register their yacht in one of several countries that have agreements with the U.S. The most common are the Cayman Islands, the Marshall Islands, Malta and Jamaica, brokers said. By registering the yacht abroad, the owner can enter the U.S. as a visiting vessel and therefore avoid the tariff.

There are restrictions and rules, and special cruising permits are required. And it can cost $5,000 to over $20,000 to register in another country. But the savings on a multimillion-dollar yacht are substantial.

“If it’s never technically imported and it never crosses the customs border line, the tariff doesn’t apply,” said Michael Moore, a maritime attorney with Moore & Co.

Registering in another country usually only makes financial and logistical sense for larger yachts, while smaller boats (say, those under 45 feet) will still likely end up paying the tariff. In that sense, the new tariff regime will create a new class of have-yachts and have-superyachts, with the super-yachters best equipped to escape the 15% tax.

Brokers said the tariffs could increase demand for U.S. yacht makers like Westport, Trinity or Burger Boat Company. And with demand for preowned yachts in a slump after a post-Covid surge, many hope sales and prices for preowned yachts already registered in the U.S. will strengthen.

“That’s my hope,” Merrigan said. “That’s what we’re all hoping.”

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Though the difference between the two brands’ monthly sales totals is relatively small, the implications of BYD beating out Tesla “are enormous,” says Felipe Munoz, global automotive analyst at JATO Dynamics.

Jaap Arriens | Nurphoto | Getty Images

Despite incurring a higher tariff rate than Tesla, Chinese electric vehicle maker BYD sold more pure battery electric vehicles in Europe for the first time ever last month — a “watershed moment” for the region’s car market, according to a report from JATO Dynamics.

New car registrations data from the automotive intelligence firm shows that BYD’s Europe volumes rose 359% in April from last year as the company continues its global expansion efforts.

Over the same period, Tesla reported yet another monthly drop, with total volumes down 49%, JATO said. That follows protests against CEO Elon Musk and the company in the region. JATO’s data comes from 28 European nations.

BYD’s success in the EU comes despite the economic bloc’s imposition of punitive tariffs on battery EVs made in China last October. The EU attributed the move to unfair trade practices.

The punitive tariffs appeared to be favorable to Tesla, assigning its made-in-China vehicles a 7.8% duty compared with BYD’s 17%. Other Chinese EV makers were given tariffs as high as about 35%. The EU also has a standard 10% car import duty.

Emerging battleground

Felipe Munoz, global automotive analyst at JATO, said the difference between the two EV makers’ April sales was relatively small, but that the implications of BYD beating out Tesla “are enormous.”

JATO added that BYD is also beating well-established European car brands across the region, outselling Fiat and Seat in France, for example.

“This is a watershed moment for Europe’s car market, particularly when you consider that Tesla has led the European BEV market for years, while BYD only officially began operations beyond Norway and the Netherlands in late 2022,” Munoz said.

BYD’s growth comes even before production begins at its new plant in Hungary, which is expected to become the center of European production operations.

“Europe is emerging as a central battleground between BYD and Tesla,” Liz Lee, associate director at technology market research firm Counterpoint Research, told CNBC. She added that the region is expected to experience higher electric vehicle market growth this year than China, which already has high EV penetration.

The tariffs have provided more impetus for Chinese EV makers like BYD to localize manufacturing in the region, according to Lee. Tesla is also reportedly working on plans to expand its manufacturing base in Germany.

JATO’s report said that while tariffs had an initial impact on the sales of Chinese automakers, the companies have mitigated it by expanding and diversifying their European line-ups with the introduction of plug-in hybrids.

“China is not only the world leader in BEVs; its automakers are global leaders in plug-in hybrid vehicles too,” Munoz said. 

Battery EVs run entirely on electricity, while hybrid vehicles combine an electric battery with an internal combustion engine. Hybrid vehicles have not yet been targeted by EU tariffs.

Meanwhile, there has been growing demand in the region’s EV segment, with JATO data showing that registrations of battery EVs and plug-in hybrid electric vehicles are up by 28% and 31%, respectively, despite declines among internal combustion engine vehicles. 

Registrations of all electric vehicles made by Chinese automakers in April rose by 59% year on year, reaching almost 15,300 units in April, the report added.

Ahead of the EU’s tariff decision last year, Rhodium had predicted that tariffs would need to be as high as 55% for the European market to be unattractive for Chinese EV exporters.

In March, it was revealed that Tesla, which only sells pure battery vehicles, fell behind BYD in total annual sales. 

Tesla’s shares have fallen over 10% over the same period amid blowback from Musk’s involvement with the administration of U.S. President Donald Trump. The CEO recently committed to leading Tesla for the next five years. 

BYD shares were up 3.9% in Hong Kong trading on Friday and have surged about 78% year to date.

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White House Senior Advisor, Tesla and SpaceX CEO Elon Musk attends a cabinet meeting held by U.S. President Donald Trump at the White House on March 24, 2025 in Washington, DC. 

Win McNamee | Getty Images

Tesla shares fell about 6% on Wednesday as data from Europe showed slowing sales last month, and investors grew increasingly concerned about President Donald Trump’s plan for tariffs.

The European Automobile Manufacturers’ Association (ACEA) revealed on Tuesday that Tesla saw a 40% year-over-year drop in new vehicle registrations in Europe in February, while overall battery electric vehicle sales were up 26%.

Meanwhile, the White House said on Wednesday that President Trump will announce new tariffs on auto imports in the afternoon. The president has hyped April 2 as “liberation day” and “the big one” for rolling out his plan to impose heavy tariffs on foreign trading partners, but Trump hinted earlier this week that auto tariffs could arrive sooner.

Movements of this magnitude have become commonplace for Tesla’s stock. On 14 separate days this year, Tesla shares have gained or lost at least 5%. Wednesday’s selloff, alongside a 2% drop in the Nasdaq, followed a five-day rally that included a 12% jump on Monday.

The trend for the year has been downward, particularly since President Trump began his second term in January, and brought Tesla CEO Elon Musk with him to the White House. As of mid-day Wednesday, Tesla was trading down about 36% since Inauguration Day, after falling 28% in February, the steepest drop for any month since December 2022.

Following the ACEA report on Tuesday, RBC analysts wrote in a note that the February numbers only represented a drop of about 11,000 Tesla vehicle registrations in Europe, and emphasized that data for the month “might not be indicative of true demand.”

New car buyers in Europe, the analysts said, “could be holding out for the Model Y refresh,” or a “new affordable model,” which they expect in the second half of the year.

Tesla is set to fully ramp up production of the redesigned version of its Model Y SUV next month. The company implemented partial production shutdowns at certain factories earlier this year to upgrade Model Y manufacturing lines.

Some prospective EV buyers have been turned off of late by Musk’s political rhetoric and his work for the Trump administration, where he’s leading an effort to slash federal government spending, cut the federal workforce, and has said he wants to privatize many services, including social security.

William Blair analysts wrote in a note on Wednesday that, “pushback from Musk’s foray into politics” has led to “brand damage and even vandalism,” for Tesla at a time when the company’s supply has been impacted by its Model Y changeover, and “Chinese competition continues to heat up.”

Still, the firm maintained its buy recommendation on Tesla’s stock, pointing to growth in the company’s energy storage business, and its prospects in driverless ride hailing. Musk has promised that Tesla will kick off a robotaxi service in Austin in June. The company has yet to begin production of its dedicated robotaxi, dubbed the Cybercab.

Alphabet’s Waymo is already operating a commercial robotaxi service in Austin and other markets. And in China, several automakers are now offering an equivalent to Tesla’s Full Self-Driving Supervised — a premium, partially automated driving system — as standard options rather than a paid service.

In China this week, Tesla renamed its FSD system “Intelligent Assisted Driving,” according to CNEVPost, after previously branding it as “Full Self-driving Capability.” Tesla’s system in all markets still requires a human at the wheel, ready to steer or brake at any time.

WATCH: Tesla expectations ‘near a bottom’

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