Europe’s largest carmaker — Volkswagen — unveiled a range of more affordable electric vehicles while Chinese giant BYD announced it will start producing a low-cost model in Europe, AFP reported. The two announcements, made at the prestigious motor show in Munich, underscore the fierce competition between traditional European firms and rapidly growing Chinese manufacturers.

VW, together with BMW and Mercedes-Benz, is trying to make up lost ground in the race for electric leadership. The German group showed four small electric models from the Volkswagen, Cupra and Škoda brands, with a starting price of about €25,000 — lower than most European EVs today. A market debut is planned for next year.

VW chief executive Oliver Blume, however, acknowledged the company faces serious challenges. “The car industry, and especially the Volkswagen Group, has never faced such strong headwinds all at once,” he said, pointing to particularly intense competition in China where VW is losing market share. “BYD is undoubtedly doing a great job there,” Blume added.

The Chinese company said the compact EV Dolphin Surf, which is already sold in Europe for about €20,000, will begin to be produced at BYD’s new plant in Hungary at the end of 2025. “We are almost ready to manufacture our cars in Europe, for Europe,” said the company’s vice-chair Stella Li. Production in an EU country will help BYD avoid the heavy tariffs Brussels has applied to Chinese EVs over alleged state subsidies.

At the same time, German carmakers are suffering from weak demand and aggressive competition in China, while the transition to electric vehicles in Europe has proven slower than expected and high prices are deterring many buyers.

Against this backdrop pressure is growing on the European Union to rethink its plan to end sales of new combustion-engine cars by 2035. Stellantis, BMW and Mercedes have already voiced scepticism or open disagreement.

Blume joined them, saying the target of “100% electric mobility” by the next decade is “unrealistic.” “We need reality checks every year,” he stressed. |BGNES