J.P. Morgan: Chinese automakers’ share in Europe rises to 25% as export profits face two policy hurdles in 2027

How much have Chinese brands gained in Europe?

According to JATO registration data, Chinese brands accounted for about 25% of Europe’s new-energy vehicle market in September 2026, up from 20% in August and about 15% at the start of the year; over the same period, their share of Europe’s passenger vehicle market rose to a new high of 14%.
BYD remained the main contributor, accounting for 8.6% of Europe’s new-energy vehicle market in September, up from 7.5% in August; the expansion of Geely and Chery’s Omoda and Jaecoo product lines also diversified the sources of growth.
Europe’s new-energy vehicle share here includes battery electric vehicles, plug-in hybrids and conventional hybrids.

In five European markets—Germany, France, Spain, Italy and the UK—sales of battery electric vehicles and plug-in hybrids rose 56% year on year in September, faster than the 11% growth in overall passenger vehicle sales; the two categories’ share of local passenger vehicle sales rose from 36% in July to 41% in September.
In the first 9 months of 2026, battery electric vehicles and plug-in hybrids accounted for 33% of sales in the five European markets, above 26% for all of 2025 but still below China’s 58% for the same period. JPMorgan believes accelerating electrification in Europe provides structural support for Chinese brands.

China’s VAT rebate rate on new-energy vehicle exports will fall from 13% to 9% effective 1 April 2027, with the applicable rate determined by the export date on the customs declaration. JPMorgan expects automakers may bring shipments forward before the change takes effect, after which they will need to absorb the impact through pricing, product mix, cost reductions and overseas production.
Assuming some costs are passed on and shipments are accelerated before April, the bank estimates that the rebate adjustment will affect industry profits in 2027 by approximately 5%–10%. BYD and Leapmotor, whose exports have a higher share of new-energy vehicles, face a greater impact.
A separate sensitivity analysis assumes shipments are brought forward, automakers use different free-on-board prices and overseas recommended retail prices remain unchanged: the estimated impact on 2027 profits is about 18% for BYD and Leapmotor, 10% for Geely, and 6%–8% for Great Wall and Chery. If automakers raise prices to pass costs on to customers, the actual impact could be smaller than these estimates.

The report says the EU has set an initial annual cap of 350 thousand vehicles on imports of Chinese-made conventional hybrid and plug-in hybrid cars, potentially taking effect as early as December 2026 and rising by 6% annually from the second year. After accounting for local production, JPMorgan estimates a potential net sales shortfall of 200 thousand–250 thousand vehicles in 2027, mainly affecting BYD and Chery; local production will gradually offset the impact from 2028 onward.
Recent sales growth may not translate into profit growth at the same pace. The bank expects Chery’s third-quarter 2026 profit to be about 5.3 billion yuan, up approximately 13% quarter on quarter, supported by sales volumes and overseas profitability; Leapmotor’s profit growth may lag sales growth because of a weaker product mix, lower export margins and rising marketing expenses.
JPMorgan expects a wider divergence in third-quarter results: BYD and Chery will broadly meet buy-side expectations, while XPeng will moderately exceed them; Geely, Great Wall, Leapmotor and Li Auto may fall short. With overseas policy costs rising, the bank favors automakers with local production capabilities and resilient earnings quality.