China’s car market is still moving fast in 2026, but the story is becoming more about competition than pure growth. Local EV brands are pushing ahead with new products and expansion plans, while established players like BMW and Mercedes-Benz are having to deal with a tougher environment, especially in China itself.
Recent updates from the industry show a clear shift. Domestic brands are strengthening their position, particularly in electric vehicles, while global manufacturers are trying to keep pace in a market that is no longer as predictable as it once was.
Nio continues its expansion plans
Nio is staying focused on growth in 2026, with new Onvo models set to help it maintain momentum in the market. At the same time, the broader Chinese EV market is becoming more mature. Growth is still happening, but it is not as rapid as in previous years, and competition between brands is increasing steadily.
For companies like Nio, this means the challenge is no longer just about expanding demand, but also about standing out in an increasingly crowded field.
BMW and Mercedes facing stronger local competition
For BMW and Mercedes-Benz, the situation in China is becoming more demanding. Both brands are reportedly expecting softer demand compared to previous years, as local manufacturers continue to improve their electric offerings and overall value proposition. That combination has made it harder for traditional premium brands to maintain their previous level of dominance.
This does not mean they are stepping back from the market. On the contrary, both companies are still investing heavily in EV development and China-specific strategies. However, the competitive gap has narrowed significantly compared to just a few years ago. BMW is hoping the Neue Klasse will turn its fortunes around there, while Mercedes is also developing some exciting new models. The question remains: can BMW and Mercedes keep up with the pace of Chinese manufacturers?
Chery Automobile. Exported 68,677 units to Europe in the first two months of 2026, up 215.2% year on year.
Chery strengthens its position in Europe
While competition is increasing in China, Chery is making steady progress in Europe. With 68,677 units exported to the Old Continent in the first two months of 2026, Chery is now the most successful car exporter in the region. This represents a 215.2% year on year increase.
The brand is becoming one of the more active Chinese exporters to European markets. Rather than rapid headline growth, Chery’s strategy appears to be focused on gradual expansion and building long-term presence. For Europe, this adds another layer of competition in an already busy market.
FAQ
What is happening in China’s EV market in 2026?
The market is becoming more competitive, with slower growth but increasing pressure between domestic and international brands.
Is Nio still expanding in 2026?
Yes, Nio is continuing to expand its lineup, including new Onvo models, while operating in a more competitive environment.
Why are BMW and Mercedes under pressure in China?
They are facing stronger competition from Chinese manufacturers that are improving quickly in both technology and value.
Is Chery growing in Europe?
Yes, Chery is increasing its exports to Europe and strengthening its position through steady expansion rather than rapid growth.
What does this mean for the European market?
It suggests more competition is coming to Europe, which could lead to more choice and stronger value across different EV segments.
Source: AutoCango
Featured Image Credit: Exeed
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