Chinese Companies in Europe — 2026-10-23

Top developments

CATL's Overseas Investment Surge

Chinese battery makers, including CATL, BYD, and Gotion, are rapidly building supply chains outside China to avoid western barriers. Since 2023, these groups have announced $90 billion in overseas investment, driven by domestic oversupply and protectionist measures in the West. The strategy aims to localize production to maintain market access despite tariffs.

CATL Shares Plunge on Profit Pressure

CATL’s shares fell more than 10% in Hong Kong and over 12% in Shenzhen A-shares on October 21. This decline followed the release of third-quarter results showing a 5.77% quarter-over-quarter drop in net profit, despite a 58.58% year-over-year revenue increase. The stock closed at its lowest level since July 2025, reflecting investor concerns over margin pressures and tax changes.

European Buyers Seek Chinese EV Partnerships

At the ongoing Canton Fair, European buyers are actively exploring partnerships with Chinese EV makers. The interest spans vehicle sales, charging infrastructure, and local production collaborations. This trend highlights a shift from direct import reliance to deeper industrial integration as tariffs reshape competitive strategies.

Call for Broader EU-China Trade Deal

Bernd Lange, the European Parliament’s trade chief, called for reviving talks on a broader trade agreement with China. Speaking on October 21, he suggested that a comprehensive deal could address unfair trade practices across multiple industries and potentially revive elements of the frozen investment pact. This comes as EU lawmakers prepare for visits to Beijing.

Deals, expansion & investment

Battery Sector Globalization Chinese battery companies are prioritizing overseas expansion to mitigate the impact of western trade barriers. The FT reports that constructing a gigafactory in China costs about a third as much and takes three times less time than in Europe, yet firms are still investing billions abroad to secure local supply chains.

Financial Cooperation Focus Participants at the Financial Street Forum in Beijing highlighted the potential for deepening China-Europe financial cooperation. Discussions centered on green bonds, tech investment, and expanding two-way investment flows, signaling a desire to strengthen industrial ties despite trade frictions.

Regulation & market context

Trade Barriers Driving Relocation Rising protectionism in the West is a primary driver for Chinese corporate relocation. The EU’s implementation of countervailing duties and stricter "Made in Europe" rules is forcing Chinese manufacturers to localize production to remain competitive.

Market Share Dynamics Despite tariffs, Chinese automakers continue to gain market share in Europe. Citi reports that Chinese automakers are gaining ground amid new export agreements, with BYD selling over 206,000 vehicles in the EU in the first nine months of 2026.

On the radar

• BYD Q3 Earnings: BYD is scheduled to release its quarterly results on October 29, 2026. Investors are watching for insights on how tariff impacts are affecting margins and European sales growth.
• L3 Autonomy Debate: At the 2026 World Intelligent Connected Vehicles Conference, executives from NIO, XPeng, and BYD debated the timeline for L3 autonomous driving, with some suggesting a "skip" to higher levels. This could influence future European regulatory alignment for Chinese tech.

By the numbers

• $90 Billion: Total overseas investment announced by Chinese battery makers since 2023.
• 206,000+ Units: Number of BYD vehicles sold in the EU in the first nine months of 2026.
• 12%: Intraday drop in CATL’s Shenzhen A-shares on October 21 following Q3 earnings.