Germany’s election this past weekend was a referendum on the country’s current economic state of affairs, which are, to put it simply, not great. And I haven’t read a single article about the state of affairs there that hasn’t mentioned the automotive industry in some way.
This powerful economic engine is rapidly losing ground in China, dealing with a stalling customer base at home, struggling with new technologies like batteries and automotive software and reckoning with the prospect of being undercut by new players on their home turf. Now, at a moment when Europe’s entire automotive sector feels like it has blood in the water, the Chinese car giant that literally makes a vehicle called the Shark is coming in to take a bite. I am, of course, talking about BYD, which is growing fast and now has its eyes on Europe.
The situation in Europe will be the primary focus of today’s Critical Materials, our morning roundup of technology and industry news. Also: what the German elections could mean for electric vehicle regulations and subsidies, and do you know anyone who wants to be the CEO of Stellantis? Because they need one, and soon.
30%: BYD Emerges As A Challenger In Europe
Photo by: BYD
Of all the Chinese automakers, I’d argue BYD gets the most recognition outside of the U.S.; it’s probably the only brand most Americans know by name, if they know any of them at all. BYD makes a lot of news in the financial press for things like out-producing Tesla at EVs and its new God’s Eye automated driving technology, which somehow packs expensive Lidar into Toyota Corolla-like affordable cars.
But here’s the thing: sales-wise, BYD is still very much a Chinese car company. For all the waves it’s made, it has barely made inroads into European car markets yet. As Automotive News reported today, it’s actually 31st by sales in the European Union and the United Kingdom, moving just under 50,000 cars there last year. For context, that’s less than Rivian sold in the U.S. in 2024.
Now, it goes on the offensive. A new compact electric crossover, local factories and two more luxurious brands are part of the plan. From that story:
BYD’s plan to change that includes targeting Europe’s biggest segment, small SUVs, with the Atto 2. It has also reversed its original plan to sell only BEVs in Europe and will also sell plug-in hybrid cars, targeting especially southern and eastern European markets where customers are reluctant to buy full-electric cars but might be persuaded to opt for a plug-in electrified model.
And BYD will bring two upscale brands to Europe: Denza, which will take aim at German premium models, is set to start sales this year, followed next year by Yangwang, a luxury brand that builds larger SUVs that will rival Land Rover and Mercedes-Benz, as well as sports cars.
BYD’s bestselling model last year in Europe was the Atto 3 compact electric SUV (13,727 sales), ahead of the Seal U large SUV (11,721), offered both as a full electric and a plug-in, followed by the Dolphin compact electric hatchback (11,452), Dataforce figures show.
BYD remains overwhelmingly reliant on the Chinese market, however. Sales were up 41 percent to 4.27 million, making it the third-ranked global brand behind Toyota and Volkswagen. Of that total, 417,000 were outside of China, including Europe. It is now the sixth-largest global automotive group.
BYD’s first plant in Europe, in Szeged, Hungary, will begin production in October. A second one, in Izmir, Turkey, will begin production in March 2026.
BYD declined to identify the exact capacity of each plant, confirming only that the combined output of the two plants at full capacity will reach 500,000 units a year.
Half a million cars a year is a lot; Audi sold about 660,000 there in 2024, if that helps put things into perspective. Hyundai and Kia both also did a little over 500,000. Besides making more cars that Europeans like—smaller vehicles, compact city cars and crossovers, etc.—it’s also responding to market shifts by selling more Dual Motor cars: its name for plug-in hybrids. And then the Denza brand will target BMW and Porsche buyers with performance, while the YangWang U8 SUV goes after Range Rover’s market.
I would argue the biggest deals, however, are the two BYD factories in Hungary and Turkey that will both be online in about a year’s time. That gives BYD a long-term foothold in the European market and makes it a provider of jobs to the region, so it could become far more powerful than just some exporter.
Even a few years ago, these would have seemed like preposterous goals from a Chinese automaker. Yet with European buyers squeezed out on new car prices and fuel prices up as well, the time is ripe for a new player to come in with more affordable and efficient options. We’ve certainly seen that playbook before.
60%: Stellantis’ New CEO, Whoever That Is, Needs To Kill Some Brands
Photo by: InsideEVs
The search for Stellantis CEO Carlos Tavares’ successor has dragged on since his unexpected departure late last year. That’s because the conglomerate needs someone who knows, and understands, 14 brands across multiple continents with little common history, heritage, culture or collective focus between most of them. After all, this is a conglomerate that owns Ram and the French luxury-premium brand DS; good luck to anyone who can make such varied components work well.
As the search goes on, Stellantis’ glut of brands may be a problem, as Reuters reports today. And any new CEO needs to take a hard look at what to cut:
The French-Italian company’s sprawling portfolio – the largest among its peers, which mostly focus on one or two brands – reflects its origins in a 2021 merger of Fiat-Chrysler and Peugeot owner PSA. Shrinking it could reduce complexity and allow some marketing, development and sales functions to be merged.
But each brand – from bestsellers like Jeep, Ram and Peugeot to struggling DS, Lancia and Alfa Romeo – has its fans, making which to drop a difficult choice. In Europe, for example, where Stellantis is the second-largest carmaker after Volkswagen, its top-selling Peugeot marque had a market share of just 4.9% last year, or eighth position overall.
Low consumer recognition of the Stellantis corporate name, unlike rivals such as VW or Toyota, is another handicap. A source familiar with [Chairman John Elkann] thinking told Reuters the topic was a priority, and that any applicant for chief executive without an idea about the brands “is not the right candidate”.
Globally, Stellantis’ sales overwhelmingly come from Jeep, Ram, Fiat and Peugeot. (The last two are the biggest by volume; I didn’t know that.) The rest make up much smaller pieces of the pie. So which Stellantis brands could be on the chopping block? Probably the obvious ones:
Brands seen by analysts as vulnerable to a portfolio reshuffle include premium marques Alfa Romeo, DS and Lancia. Dodge and Chrysler are seen as survivors despite a less than stellar performance, as they have U.S. driver recognition and appeal to specific market segments.
Most of Stellantis’ brands aren’t doing great. Sales for the conglomerate were down 15% last year, with only Fiat showing growth. Stellantis also needs to cut costs and invest in electrification, something it has been late to, in order to survive. Whoever the new boss is, they will have some hard decisions to make.
90%: What Germany’s Elections Could Mean For EVs
A politically conservative coalition has now ascended to power in Germany, and it will no doubt need to have plans to revive the country’s sagging automotive sector. Yet any policy changes come at a time when automakers invested heavily into electrification and a more all-EV future—some more successfully than others—and they all want consistency on regulations so they know how to plan for the future.
That could mean pushing to relax some of the fuel economy and emissions rules that were driving EV growth, but it probably won’t mean a comeback for EV subsidies, reports Forbes:
Problems likely to remain unresolved include chronic weakness in China, the threat of Chinese imports into Europe, and President Trump’s promised tariff war. Slack electric vehicle sales require subsidies from a government struggling for money. The overall market for sedans and SUVs also could use some stimulus. Don’t expect any.
One bright spot might be a concession from the European Union that the strict CO2 emissions rules, outlawing the sale of new gasoline and diesel-powered cars by 2035, might be diluted.
Investment bank UBS said neither the [conservative party or center-left party] had called for specific auto demand stimulus. The latter had called for renewed EV subsidies. These were withdrawn just over a year ago prompting the bottom to fall out of the German EV market, but the conservative manifesto didn’t mention this. UBS thinks new EV subsidies are unlikely.
“The [new coalition] has been vocal in challenging the EU’s ICE car ban for 2035,” UBS said.
In other words, this set of policies could contribute to a wider slowdown in EV growth. However, it’s unlikely to stem demand for hybrid cars, and any automaker not investing in electrification will have BYD and the rest to deal with.
100%: Which Stellantis Brands Need To Go?
Photo by: InsideEVs
At a time when the auto industry faces unprecedented challenges, does the world really need DS? Or Alfa Romeo, which tried and failed at a big turnaround in the 2010s? Or even Chrysler, which in my four decades on this planet, has maybe had its you-know-what together once or twice?
Stellantis has some tough calls to make. Where would you swing the axe?
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