European automakers are increasingly turning to affordable electric versions of classic car models as they face mounting competition from Chinese manufacturers expanding into their home markets. At an industry event in Paris, Stellantis revealed plans to reintroduce its iconic postwar-era 2CV as a fully electric vehicle priced around €15,000, expected to launch in 2028. This follows similar efforts by Renault, which has revived its R5 and Twingo models in electric form, and Volkswagen, which introduced the ID. Polo, an electric hatchback inspired by the longstanding Golf, priced at €25,000.

Stellantis CEO Antonio Filosa highlighted the 2CV’s potential, noting it will be built entirely in Europe on a new electric platform designed to reduce costs. The vehicle drew large crowds at the show, underscoring the appeal of heritage and nostalgia that European brands hope will differentiate them from Chinese rivals.

Chinese carmakers currently represent about one-third of exhibitors at European auto shows, with newer entrants like Li Auto and Aito joining established players such as BYD. These companies are not only targeting the lower end of the market but are increasingly competing in the premium segment, challenging European luxury brands such as BMW and Porsche. According to consultancy AlixPartners, Chinese brands’ share of European vehicle sales is expected to rise from 12% today to 16% by 2030.

Cost disparities remain significant. Chinese-made electric vehicles (EVs) typically retail for around $20,000 compared to roughly $31,000 for European equivalents, largely due to cheaper batteries and materials. This price difference, alongside sluggish demand, has contributed to European factories operating under 60% capacity and has led to numerous job cuts.

In response, Chinese manufacturers are pursuing local production and supply chains within Europe to navigate new hybrid export restrictions and protectionist policies. Changan Group aims to produce its first European-built vehicle by next year and targets 180,000 units annually in Europe by 2028, with ambitions to become one of the world’s largest automakers by 2030. Likewise, Chery plans to start manufacturing in Spain and is negotiating with Nissan to share production at the Sunderland plant in the UK. The company’s chairman, Yin Tongyue, emphasized the importance of operating in a local environment to compete effectively.

European car industry leaders, including those at Stellantis, Volkswagen, and Renault, advocate for the finalization of “Made in Europe” rules that would require Chinese brands to meet the same manufacturing and sourcing standards in Europe. These regulations aim to support the EU’s automotive sector and will be phased in over the next three years.

European manufacturers are also striving to improve efficiency and reduce costs. Renault, in particular, has accelerated vehicle development timelines to under two years by integrating Chinese components and expertise into its supply chain. CEO François Provost expressed confidence in competing with Chinese manufacturers producing cars locally, noting the importance of aftersales service and parts availability as key factors beyond purchase price. Renault’s head of product, Bruno Vanel, added that electric revivals of classic models are intended to reinforce brand heritage rather than serve purely as marketing exercises.

While European executives often point to limited spare parts availability and weaker aftersales networks as constraints for Chinese brands, companies like BYD have established extensive European logistics infrastructure, including 15 warehouses spanning 150,000 square meters. BYD has also recruited talent from established automotive firms, appointing experienced designers such as Wolfgang Egger, formerly of Alfa Romeo and Audi, to lead its European design efforts.

Alfredo Altavilla, a special adviser to BYD’s European operations, emphasized the group’s integration into the European market, citing its Milan design center and European leadership team as examples of its local focus. As European automakers seek to defend their market share, the interplay of heritage, cost competitiveness, and local production will shape the evolving competitive landscape.