In May 2026, five Chinese automakers—BYD, SAIC Motor, Geely, Chery, and Leapmotor—collectively sold 138,410 passenger vehicles across 31 European countries, a 65% year-over-year increase. In the same period, six Japanese automakers—Toyota, Honda, Nissan, Suzuki, Mazda, and Mitsubishi—sold 130,424 vehicles in Europe, down 3% year-over-year. For the first time, Chinese automakers surpassed their Japanese counterparts in monthly sales volume in Europe, with a lead of 6%. This shift occurred against the backdrop of the European Union imposing additional tariffs of up to 35.3% on Chinese electric vehicles starting in autumn 2024. Despite these high tariff barriers, Chinese automakers have broken through the market by exporting plug-in hybrid electric vehicles (PHEVs)—which are exempt from the extra tariffs—as well as leveraging cost control and competitive pricing. For example, the BYD Dolphin Surf starts at €26,990 in Europe, undercutting some local rivals. Data shows that in April 2026, Chinese automakers’ sales in Europe were still slightly below those of Japanese brands, but they overtook them just one month later, reflecting strong growth momentum. Over a longer timeframe, SAIC Motor has posted year-over-year sales growth in Europe for 17 consecutive months, while BYD—since being included in the European Automobile Manufacturers' Association (ACEA) statistics in July 2025—has recorded year-over-year growth for 11 months. In contrast, Japanese automakers have shown overall weakness, with most brands experiencing year-over-year sales declines in the majority of months over the past two years in Europe. Product portfolio differences are a key factor. Chinese automakers offer a comprehensive range of new energy vehicles (NEVs), covering both battery electric vehicles (BEVs) and PHEVs, aligning well with renewed or expanded EV purchase incentives in many European countries. Germany, Sweden, Italy, and others reinstated subsidies for BEVs and PHEVs around 2026, offering incentives of up to €6,000. Japanese automakers, however, have lagged in rolling out BEV models and thus miss out on these incentives, leading to diminishing market presence. Strategically, Japanese automakers are deprioritizing the European market. In its April 2026 plan, Nissan emphasized focus on Japan, the U.S., and China, with limited attention to Europe. Meanwhile, Chinese automakers are accelerating localization in Europe: Leapmotor plans to produce locally using Stellantis’ factory in Spain, while Chery has already established its European headquarters in Barcelona and is negotiating to take over idle capacity at Nissan’s Sunderland plant in the UK. As a leading Chinese automaker in overseas expansion, BYD sold 789,367 vehicles abroad in the first half of 2026, up 70% year-over-year. In June, overseas sales accounted for 44% of its total volume. The company has set an ambitious full-year 2026 overseas sales target of 1.6 million units, representing more than 50% growth compared to 2025. This sales reversal is seen as the result of converging forces: the global automotive industry’s electrification transition, diverging corporate strategies, and evolving regional policies—marking a substantive shift in the competitive landscape between Chinese and Japanese automakers in Europe.