China exported more than one million cars in June alone, suggesting the annual figure could top 10 million in 2026.
This would see China exporting more than twice as many cars this year as in 2023 and 3 million more than last year.
Chinese automotive brands accounted for one in every 10 cars registered in the European Union in May, overtaking their Japanese rivals for the first time.
The car industry has been pressing the European Commission to apply a Made in Europe rule that would ensure that 70 per cent of vehicles sold in the EU sourced 70 per cent of their value in Europe.
Speaking on The Pat Kenny Show, Director of Autoanalysis Consultancy, Ian Henry, believes that "this year they'll take about 16% of the European market, possibly higher in the UK."
"The reason for production to shift into Europe is because of the fear that the EU will impose expensive tariffs on the cars, which might make them unaffordable when priced in comparison to the traditional European brands."
"The EU has already imposed significant tariffs on Chinese electric vehicles around a year ago, up to 35% on some brands."
Mr Henry continues, "We as consumers don't seem to object to Chinese-made iPhones or Chinese-made computers or the chips in our computers coming out of China."
"At the end of the day, unless the EU in particular, decide to erect barriers to trade and ban imports or investments entirely in Europe by the Chinese, then they are going to come."
The share of electric cars sold by Chinese brands rose to 14.2% across western European markets, or one in every seven battery electric vehicles in the first five months of this year, according to Schmidt Automotive Research.
Brands including BYD, Chery, SAIC and Xpeng have targeted Europe for exports, as the Chinese industry seeks to dominate the global electric vehicle market.
BYD has been speculated to take over direct control of its Irish operation later this year. The brand has been managed in Ireland by Motor Distributors Ltd since 2023 and is the ninth bestselling new car brand so far this year.
Automotive Rules
Mr Henry explained that "new imminent rules within the EU under the Industry Accelerator Act or the Made in Europe policy will require companies to make their vehicles, particularly electric vehicles and their batteries, within the European Union in order to qualify for available market subsidies and to count towards corporate fleets for zero emissions calculations."
The increase in European sales comes despite EU tariffs of up to 35.3% for electric cars made by some Chinese manufacturers, on top of the standard 10% import duty.
"Currently you have the direct import of wholly assembled vehicles from China into Europe and being on sale in showrooms everywhere and then you have the construction of Chinese factories."
"The question is, will those simply be assembly lines where all the parts are made in China and then put together in Europe? They may start as kit assembly operations, but in order to comply with local content rules, both under the new Industry Accelerator Act and also for Chinese vehicles made in Europe to be exported, they would have to have a certain level of local content."
Mr Henry believes that "they will have a mixture of all new factories and some cases where they'll take over existing factories, or they will do partnerships with car companies here."
"I spoke to a Volkswagen executive some time back, and he said, 'We will rise to the challenge. We rose to the Japanese.
We rose to the Koreans. We will rise to the Chinese.' But this is almost too huge a challenge, given the population base of China and the number of car manufacturers they now have."
These latest figures will further anxiety within the European car industry as Volkswagen expects to sell 3% fewer vehicles this year, preparing to use a cost-cutting programme that will put 100,000 employees' roles at risk.
