European electric vehicle market presents new challenges for Chinese automakers

The Chinese automotive company BYD has set a new world record by unveiling its electric hypercar, the Yangwang U9 Xtreme. This vehicle reached a speed of 503.17 kilometers per hour, becoming the first mass-produced car to exceed the 500 kilometer per hour mark.

This record was set on a specially secured section of the Sheikh Khalifa bin Zayed Al Nahyan Road (E11) in Abu Dhabi. During the tests, the car was driven by professional racer Mark Baseng. The achievement was officially registered by the International Automobile Federation (FIA) and the Guinness Book of Records.

The Yangwang U9 Xtreme demonstrated impressive speed, capable of covering a distance of 140 meters in just one second, which is equivalent to a distance greater than a football field. Previously, in September 2025, this same car reached a speed of 496.22 km/h at the ATP Papenburg test track in Germany, but the new result surpassed the previous one by 6.95 km/h.

It is important to note that this achievement is particularly significant because the testing was conducted not on a professional race track, but on a closed and safe section of the E11 highway in Abu Dhabi. This allowed the car to be tested under real-world conditions, where it faced challenges such as high temperatures, strong crosswinds, and dust.

The Yangwang U9 Xtreme is built on a high-voltage platform with a capacity of 1200 volts and is equipped with four electric motors capable of reaching speeds of up to 30 thousand rpm. The total output power of all motors is 2977 horsepower. Changes were made to the tires, braking system, cooling architecture, and body control system to maintain safety and stability at such high speeds.

BYD confirmed that this is a limited series, and only 30 units of the car will be produced worldwide.

With the entry of Chinese manufacturers into the Brazilian automotive market, a significant change is observed in how the value of used combustion vehicles is perceived. Consumers who bought combustion SUVs a few years ago may now have a direct competitor in a brand new Chinese car when trying to resell their vehicle.

This movement gained momentum in 2023 with the introduction of models like the BYD Dolphin and GWM Haval H6, and intensified between 2024 and 2025 due to continuous launches and price competitiveness. In 2026, the Chinese influence is already noticeable: according to Bright Consulting, these brands accounted for 21.4% of light vehicle registrations in September, more than double the participation recorded the previous year, transforming a mere purchasing alternative into a factor influencing the entire sector's dynamic.

The price dispute in the mid-range

Competition is particularly visible in the price range between R$ 100 thousand and R$ 150 thousand. A buyer interested in a used combustion SUV with two or three years of use can find, within the same budget, an entry-level Chinese electric car, such as the BYD Dolphin Mini. Despite differences in size and purpose, these vehicles begin to compete for the attention of the same consumer, which explains the pressure exerted on the values of used SUVs in this category.

Although some customers prioritize the space and versatility of a traditional SUV, others opt for a new vehicle, which offers embedded technology, factory warranty, and after-sales support, even if they give up a larger body. Thus, market comparison transcends similar models, starting to involve the benefits of distinct categories, requiring a new analysis of cost-benefit in the used segment.

Impact on pricing and challenges for retailers

The main impact of this competition lies in price formation. Historically, the brand-new vehicle served as a crucial reference for the value of a used one. However, when Chinese manufacturers offer discounts, bonuses, or more advantageous financing conditions, this reference is altered, pressuring the depreciation of combustion models and consequently lowering the value of used ones.

For merchants, the challenge is amplified, as a car acquired for stock may need a price reduction to remain competitive, directly affecting profit margins. Data provided by IBV Auto, from Banco BV, indicates that combustion vehicles comparable to those electrified in 2023 suffered a depreciation of 22.2% by September 2026. It should be noted that this drop is not exclusive to Chinese brands, as electric and hybrid vehicles also registered even greater losses in this survey, demonstrating that the pressure on resale value affects various technologies.

Retail adaptation and manufacturer reaction

The current scenario imposes on retail the need to manage inventory with greater rigor. The liquidity and price of the same model can vary regionally, depending on local supply and demand, suggesting that pricing must go beyond traditional references, using updated data, artificial intelligence, and behavioral analysis to optimize sales and profitability.

Established manufacturers are also responding to this dynamic, either through more attractive commercial offers or by investing in equipment updates and electrification. Hybridization projects with flex technology, such as those developed by Stellantis, illustrate the search for solutions suitable for the Brazilian market. However, there is an additional risk in this dispute: preserving the residual value of the vehicles. Very aggressive discounts can boost short-term new car sales but can also distort the price reference for those who already own a car of that brand.

Future prospects of the automotive market

Looking ahead to the coming years, it is expected that the competition will gain new layers. The production of Chinese vehicles in Camaçari, Bahia, and Iracemápolis, São Paulo, adds an important variable related to the recomposition of import taxes. Simultaneously, the recently introduced electric and hybrid vehicles in Brazil are consolidating a broader used market. With potentially lower prices, these models will compete directly with used combustion vehicles, expanding the rivalry beyond new electric models.

This moment is seen as a phase of maturation for the Brazilian market. Combustion vehicles will maintain their relevance, but their competitive capacity will depend less on brand tradition. For buyers and sellers, possessing reliable information about prices, history, maintenance, and vehicle conditions will be essential for more transparent and secure negotiations. Ultimately, the value of a used car will be determined not only by its condition when leaving the dealership but also by the vehicles it will have to compete against at the time of sale.

Those who have followed the Brazilian automotive market for several decades remember the first wave of Chinese cars that arrived in the country. Initially, these vehicles were characterized by attractive prices, but often presented deficiencies in terms of finishing, manufacturing quality, and longevity. At that time, it was unlikely to predict that the Chinese industry would achieve such rapid advancement, challenging global automotive manufacturing giants in less than two decades.

The Chinese presence in Brazil gained traction in 2006, with the start of operations of Chana Motors, which later adopted the name Changan. The brand was known both for its compact utilities and for the jokes its name generated among Brazilians. Its portfolio was modest, consisting of a passenger van, a truck, and a small pickup, without offering significant sophistication or technological innovations.

In the following year, Hafei emerged, introducing the Towner Junior model. The participation of Chinese manufacturers remained discreet, focused mainly on low-cost commercial vehicles. The landscape began to change in 2009 with the arrival of Chery, which launched models such as the Tiggo SUV and the QQ compact, in addition to the later Face and Cielo. These products aimed to attract consumers willing to invest less in a new car.

Another company that sparked great interest was JAC Motors, which started its activities in Brazil in 2011. The brand invested heavily in advertising, even using the 'Domingão do Faustão' program to promote its vehicles, betting on the J3 and J3 Turin compacts. The JAC emblem itself also generated discussion due to its similarity to the symbol of Chrysler, the American manufacturer.

However, the offer of low prices and advertising campaigns was not enough, as the first Chinese cars faced a greater barrier: public distrust. At that time, the Chinese automotive industry had little experience compared to traditional European, American, and Japanese manufacturers. Many of its products displayed simple finishes, questionable quality materials, and durability issues, resulting in a poor image, especially in the used car market.

The Brazilian consumer observed these automobiles cautiously, as acquiring an affordable vehicle could imply high maintenance costs, rapid depreciation, and mechanical failures years later, making the cost-benefit ratio uncertain. Despite this, the Chinese industry demonstrated a remarkable capacity for learning, a phenomenon that had already occurred on the global stage. It is relevant to mention the trajectory of Japanese cars, which began gaining international space in the 1960s and took about two decades to consolidate the reputation for reliability and quality they possess today. South Korean manufacturers followed a similar path, rapidly evolving to compete with established European and Japanese players.

The Chinese followed this same path, but at an even faster pace. In just over ten years, they transitioned from producers of simple and cheap cars to manufacturers of vehicles with excellent build quality, refined finish, and advanced technology. The disparity between the initial models and the current ones is considerable.

If the improvement in quality was already noticeable, it was with electric and hybrid vehicles that the Chinese industry redefined its global position. While many traditional automakers were still debating electrification routes, Chinese companies dedicated massive investments to the development of batteries, electric motors, electronic systems, and new charging technologies. This effort bore fruit in just a few years.

Currently, China holds a prominent position in the development of electrified vehicles. Its manufacturers offer cars with high performance, good autonomy, sophisticated finishing, and technological features that, in some cases, directly rival products from much older brands. A curious situation has occurred: European and American automakers, once references for the Chinese industry, are now seeking partnerships and technologies developed in China itself to boost their electrification projects.

This reversal of roles was unimaginable when the first Chery QQ, JAC J3, and small Chinese utilities circulated on Brazilian streets. The consumer witnessed this metamorphosis, and Chinese cars ceased to be sought solely for their low price, beginning to generate interest in performance, integrated technology, and the variety of equipment offered.

The evolution of products paved the way for a new wave of expansion in the Brazilian market. Companies such as BYD, GWM, Caoa Chery, and JAC Motors assumed relevant positions in this movement, implementing distinct commercial and industrial strategies. BYD and GWM, for example, advanced to local production, signaling that their plans for Brazil go beyond mere vehicle importation. Other companies, including Omoda, Jaecoo, GAC, Leapmotor, Geely, and Zeekr, have also begun to compete for buyers' attention.

However, not all managed to keep up with this expansion. Neta, which entered the Brazilian market with ambitious goals, suffered losses due to financial problems faced by its Chinese parent company, serving as a warning that Chinese origin and high-tech offerings do not automatically guarantee a manufacturer's commercial success.

The range of Chinese brands operating in Brazil increased even further with the arrival of Jetour, MG, Denza, and Changan, which have already debuted in the national territory. Jetour, associated with the Chery group, focuses on hybrid SUVs, while Denza, BYD's luxury line, targets the premium car consumer. MG, a traditional British brand under the control of the Chinese group SAIC, also began sales in the country, as did Changan, which returned to the Brazilian market in collaboration with the Caoa group. Each adopts distinct tactics to compete in practically all price segments.

This intense movement is already having repercussions on traditional automakers. To deal with the new competitors, many are being forced to revise price lists, increase equipment packages, and accelerate the development of electrified vehicles. This occurs because the Chinese have identified a highly effective commercial formula: delivering a lot of technology, equipment, and performance for competitive prices, a combination that demands an immediate response from established brands.

Those who saw the first Chinese cars sold in Brazil recognize the vast distance between those initial models and the current ones. In about twenty years, an industry initially viewed with skepticism has come to compete with century-old manufacturers and, in certain technological areas, taken the lead. Chinese cars have stopped being mere economic alternatives; they have become competitors that traditional brands can no longer ignore.