The fallout from the aggressive price war currently impacting China’s EV market could hit European new and used car markets, experts have warned.

Chinese automakers have slashed prices by up to 34%

With Chinese automakers slashing prices by up to 34% and average EV discounts reaching a record 17%, the ripple effects could impact new and used car values across Europe and the UK, according to Indicata.

The Chinese automotive market, while projected to exceed 33 million vehicles in 2025, is experiencing what industry observers are calling a ‘bloodbath’ as more than 100 different EV brands compete in an unsustainable market structure.

Leading Chinese manufacturer BYD recently announced dramatic price cuts across over 20 models due to excess inventory, triggering an industry-wide response that has flattened vehicle margins and threatens to spill over into Europe.

With Chinese automakers slashing prices by up to 34% and average EV discounts reaching a record 17%, the ripple effects could impact new and used car values across Europe and the UK.

Andy Shields, Indicata’s global business unit director

Andy Shields, Indicata’s global business unit director, warned: “Chinese OEMs are facing massive oversupply and intense competition in their domestic market.

“They need to find markets outside of China to sell their vehicles, and Europe represents their most viable and profitable export destination.”

And the UK market is seen as most vulnerable to China’s European sales push due to a lack of additional tariffs on Chinese battery electric vehicle (BEVs) along with higher demand and charging infrastructure than other European markets.

At the same time, restricted Chinese new car sales will encourage European carmakers to concentrate more on their home market, leading to increase competition and potential price wars.

For European consumers, the short-term benefits include access to lower-priced, technologically advanced vehicles. However, the potential long-term implications for used car markets could be notable, as the influx of competitively priced Chinese vehicles may create downward pressure on used vehicle valuations across multiple segments.

“We’re looking at a potential shift in market dynamics. The excess supply of new Chinese products has the potential to continue increasing pressure on used vehicles in Europe because of lowering new car list prices and excessive supply,” Shields stressed.