Chinese electric-vehicle giant BYD has overtaken rivals to claim the top spot in the global EV market, allegedly through a 'pirate business model' built on copying, reverse engineering, state subsidies, and aggressive pricing — raising alarm bells across Europe and North America about the future of their domestic auto industries, according to a new report by European media outlet Politico.

BYD's Scale and Market Dominance

BYD sold approximately 4.6 million vehicles in 2025, including 2.26 million pure battery-electric cars — comfortably surpassing Tesla's roughly 1.6 million deliveries in the same period. The numbers underline a dramatic shift in the global EV hierarchy, with the Shenzhen-based automaker now setting the pace that Western manufacturers are scrambling to match.

The report describes BYD's ascent as the product of a deliberate strategy: 'copy, absorb, subsidise, scale, dump and dominate'. Its earliest models, it alleged, were copies of Japanese automaker designs. BYD subsequently moved to produce batteries, motors, electronics, powertrains, and semiconductors entirely in-house through reverse engineering, achieving a degree of vertical integration that legacy Western automakers have struggled to replicate.

How State Support Amplified the Advantage

According to the report, BYD's vertical integration was supercharged by sustained state support and privileged access to China's enormous domestic consumer market. Foreign automakers, the report noted, were offered entry into that market through joint ventures — described as a 'devil's bargain' of forced technology transfer, which critics argue effectively handed Chinese manufacturers the intellectual capital needed to compete globally.

This combination — captive home market, state backing, and absorbed foreign technology — allowed BYD and other Chinese automakers to scale rapidly and then expand into Europe and other regions at price points that legacy manufacturers find difficult to match without restructuring.

The Toll on European Automakers

The consequences for established European brands have reportedly been severe. The report singled out Volkswagen, noting that its China earnings have fallen more than 80 per cent over the past decade. The German automaker is reportedly planning to cut 35,000 jobs in Germany by 2030, is considering the closure of as many as four factories in the country, and is weighing up to 1 lakh job cuts worldwide — a scale of restructuring the report described as 'once unthinkable'.

Mercedes-Benz and BMW are also reportedly facing mounting pressure as Chinese automakers gain market share across Europe. The report warned starkly: 'This will not end well unless the West unites. BYD is not just another automaker — it is a pirate ship with a balance sheet, weakening both Europe's and America's industrial bases, one cheap EV at a time.'

Europe's Fragmented Response

European Union officials have proposed a 17 per cent countervailing duty on Chinese electric vehicles. However, the report alleged that the bloc's response has been undermined by internal fragmentation, with member states divided over trade concerns and the implications of restricting Chinese investment. The lack of a unified front, critics argue, has diluted the effectiveness of any protective measures.

Notably, this is not the first time the EU has grappled with the challenge of coordinating a collective industrial response to Chinese competition — a pattern that has repeatedly hampered decisive action across sectors from solar panels to steel.

North America in the Crosshairs

Chinese automakers are reportedly using Canada and Mexico as strategic staging grounds for eventual entry into the United States market. The approach, according to the report, involves building dealer networks and studying consumer preferences while awaiting regulatory access — a patient, long-game strategy that mirrors how Chinese manufacturers have historically entered other protected markets.

With the US market still largely insulated by tariffs, the pressure on Europe is expected to intensify in the near term as Chinese EV exports that cannot enter America are redirected westward. How Western governments and automakers respond in the coming months could determine whether the legacy auto industry undergoes managed transformation — or an accelerated decline.