When Hyundai CEO José Muñoz calls Chinese car technology "incredible," he is warning that the competition has changed. Chinese automakers are now direct rivals, already holding up to 10% of the European market and outselling established brands such as Mercedes-Benz, Toyota, Hyundai, and KIA in plug-in hybrid sales.
Muñoz is clear: Chinese brands are already a threat. Their impact is visible. In Spain, Chinese brands now hold a 14% market share, the highest in the EU. In the UK, their share is around 15-16%. These are current figures, not forecasts. The European Automobile Manufacturers Association (ACEA) reports that Chinese brands made up more than 9% of the EU market in the first half of 2026, a sign of how quickly their presence is growing, information from Reuters.
In June 2026, Chinese brands accounted for about 34% of the European plug-in hybrid (PHEV) market, surpassing many traditional players in the segment.
In the past, China required foreign carmakers to form joint ventures. Now, Chinese manufacturers are entering Europe on their own. Even with extra tariffs on Chinese electric vehicles, the flow has not slowed. Companies such as Chery and SAIC are assembling cars in Spain, but the technology and basic components are still Chinese. The price difference is impressive: Chinese cars can be 30-40% cheaper than competitors in Spain, France, and Italy. Reuters quotes Muñoz as saying the new idea and pace of improvement from Chinese brands are "incredible."
The United States is trying to slow the influx with a 100% tariff on Chinese electric vehicles and a planned ban, from 2027, on cars with software linked to the Chinese government. There are exceptions: Volvo, for example, can manufacture in South Carolina, while Polestar cannot. Even Donald Trump, known for his protectionist views, has said he would welcome Chinese manufacturers if they build cars and create jobs in the US. Ford CEO Jim Farley expects Chinese brands to arrive in America within a decade. Under US regulations, the final rule on connected vehicles related to China and Russia will ban the sale of cars with certain software starting with the 2027 model year. Hardware restrictions will follow.
For Hyundai, the challenge is real. Muñoz, who previously led Nissan’s operations in China, knows what is at stake. He is pushing Hyundai to develop advanced driver assistance systems, aiming to match Tesla’s FSD with SAE level 2+ and 2++ technology developed with Nvidia. Production is planned for 2028, though it may slip to 2029. Muñoz says Hyundai must develop basic technologies such as batteries in-house to stay competitive.
Reuters reports that Chinese sales have continued to grow despite the EU introducing higher tariffs on Chinese electric vehicles after a subsidy investigation. European authorities are considering further measures, including limiting Chinese hybrids to 15% of the market or imposing additional tariffs if exports do not slow down.
Chinese expansion extends beyond new brands. The rapid growth of plug-in hybrids and electric vehicles from China has already changed the European market. As reported earlier, Chinese models are now common in Spain and more than 30 other markets, with sales numbers that would have seemed unlikely just a few years ago.
Information from Reuters, Muñoz does not want to shut out Chinese competition. Instead, he calls for a realistic assessment of the technological and economic facts. His message is that tariffs and regulations may slow Chinese brands, but they will not stop them. Competition will turn on new idea and cost, along with how quickly companies can meet customer needs at lower prices.
Muñoz’s assessment reflects how sharply the industry is shifting. European and American carmakers can no longer rely on their history or protectionist policies. The Chinese challenge goes beyond price, extending to the push for technological leadership. For Hyundai and its competitors, keeping up will mean matching that pace or risking a loss of ground in a market changing faster than many expected.
