Chinese automakers retain a substantial cost advantage over European rivals in electric-vehicle production, according to AlixPartners. The consultancy estimates that building a comparable vehicle in China costs about US$11,000 (R$55,100) less, even after tariffs. Its findings were released as the Paris Motor Show opened on October 12, an event with twice as many Chinese exhibitors as in 2024.
The report also highlights a faster product-development cycle: Chinese companies can bring a model to market in around 24 months, compared with as long as 60 months for established European manufacturers. That pace is reflected in model age: vehicles launched within the previous three years make up 76% to 100% of Chinese automakers’ sales, while the equivalent share for European companies averages below one-third. AlixPartners executive Xing Zhou said Chinese brands have captured 10% of Western manufacturers’ European volume in just a few years.
European automakers face the challenge as profitability and investment needs collide. Their average EBITDA margin fell from 13.2% in 2021 to 6.9% in 2025, while companies need funding for electrified and software-defined platforms. AlixPartners points to 15 European assembly plants running below 60% capacity, together capable of producing about 2.5 million vehicles annually, and says consolidation, closures or conversions may be needed. It also warns that roughly 80% of refining capacity for battery and cathode materials is located outside Europe, leaving the region with a supply-chain weakness that factory investment alone will not solve.