Shipments and customer sales tell different stories

The IEA’s update for the first half of 2026 reports falling domestic car sales in China alongside strong export growth, with a growing gap between electric cars exported and those sold in overseas markets. Transport time explains part of that gap, although the IEA considers its size consistent with unusually high stocks in some markets. These are market-wide findings and should not be read as a diagnosis of any particular manufacturer. [S1]

For an importer or dealer, the important question is where those vehicles are and who is paying to hold them. Cars may still be in transit or waiting for buyers at an importer or dealership, allowing the manufacturer to report higher shipments while its local partner carries the cost of unsold stock.

Europe is also one of several markets available to Chinese manufacturers. The IEA reports that emerging markets are becoming more important, while Europe’s share of Chinese electric-car export value fell in 2025. [S2]

European partners therefore need to understand what the manufacturer wants from their market. Building a lasting business, finding buyers for spare production and meeting a volume target can all support a decision to export, but they can lead to different choices about pricing, stock and investment. Those differences matter when the importer is committing its own money.

The price difference is only the starting point

A vehicle selling for more in Europe than in China can suggest an attractive profit opportunity, although the price comparison leaves out much of the cost of serving the market. Transport, import duties, vehicle approvals, marketing and finance offers all need funding, alongside warranty work, parts supply and the people who handle technical problems.

The useful calculation starts with the price actually received after discounts, then follows each cost to the company responsible for paying it. An importer may receive a good purchase price while agreeing to buy more stock than local demand supports, just as a dealer may earn a reasonable margin on the initial sale while waiting too long for warranty payments.

These problems are familiar across the industry, including among established brands. During a new market launch, however, the small number of vehicles already on the road can make the service operation look more capable than it will be at scale. A launch team can give close attention to early customers, whereas supporting thousands of vehicles requires reliable processes, enough people and continued funding.

Launch support can help build that operation, provided both sides understand how long it lasts, which costs it covers and how the business will pay for those costs afterwards.

The stock agreement deserves close attention

A manufacturer plans production across several markets, while an importer has to sell the particular vehicles it has ordered in its own country. Moving unsold cars elsewhere may be expensive because specifications, approvals, taxes and customer preferences differ.

The volume agreement therefore deserves close attention, especially when the manufacturer’s production target and the importer’s sales forecast rest on different assumptions. Both parties need to examine actual customer sales and the age of unsold stock alongside shipments, with enough detail to understand how the vehicles are reaching the market.

Demonstrators, fleet sales and registrations used to support a launch can each serve a useful purpose, but they produce different margins and cash needs. Combining them in a single volume figure makes it harder to see whether demand is developing as expected.

The agreement should also explain how the partners will respond to ageing stock, including who can approve discounts, who funds them and how far the next order can be adjusted. A model replacement or the loss of a competitive finance offer can change the sales outlook quickly, leaving an importer with commitments made under very different conditions.

Regular forecast meetings help only when the people involved have the authority to change orders or approve the support needed to sell existing stock.

Trade rules affect the next order

The EU’s measures on battery-electric vehicles from China have a defined scope, so the treatment of the actual vehicle needs to be checked before its import cost is used in the business plan. [S3] The commercial agreement also needs to establish who carries a change in duties and which orders can still be adjusted.

October’s EU–China statement shows that discussions are continuing, but it does not provide a basis for assuming terms that have not been confirmed. [S4] An importer placing an order needs to work with the rules that apply to that transaction, while understanding how much cash is exposed to a later change.

Service costs continue after the sale

Every vehicle sold creates a need for parts, diagnosis, warranty repairs and software support over the following years. Those needs remain even when later vehicle sales fall below plan, which makes service funding an important part of the original commercial agreement.

The business case should explain how warranty work will be paid for, how dealers will obtain technical help and how parts supply will be maintained during a difficult sales period. Where future sales are expected to fund these commitments, the required volume and the responsibility for any shortfall need to be clear.

Established dealer groups bring customer relationships, local knowledge and workshop capacity that a new brand would otherwise have to build. Maintaining those capabilities costs money, and the partnership needs to leave dealers with enough return to keep investing in them.

A network can look extensive on a launch presentation while remaining financially too weak to provide the support customers will eventually need.

Before committing to more volume

Chinese manufacturers and their European partners can build successful businesses together, but their forecasts need to connect factory output with local customer demand and the cost of supporting the vehicles sold.

Before agreeing to the next volume commitment, both sides should compare their assumptions about selling prices, stock levels, discounts, service costs and cash needs. That discussion will show where one party’s growth plan depends on another party accepting a cost or risk it has not fully allowed for.

Those differences are easier to address before the cars leave the factory, while there is still room to change the commitment. Once the vehicles arrive, the cost of holding them has already begun.