BYS in Europe: Chinese electrical vehicle (EV) maker BYD's five models available in Germany will be showcased at a new BYD-only store in Berlin operated by Sternauto, indicating an rapidly encroaching move on European turf.

Sternauto, which has exclusive rights to sell BYD cars in eastern Germany, set up the store to get closer to customers as awareness of the brand grows among Germans seeking an affordable EV.

"One of the biggest topics for BYD is that it is not that familiar to German customers," said Oliver Hein, Head of BYD for Sternauto.

The recognition is growing "exponentially" as the brand invests heavily in marketing, he said.

While most of BYD's revenues still stem from sales in China, the carmaker has set its sights overseas with new manufacturing capacity under construction in Hungary, Brazil, and Thailand.

It sold more EVs than Tesla in the fourth quarter of last year and is growing at a fierce speed, with 2023 net profit expected some 86.5 per cent above 2022 levels.

Already, it is coming under scrutiny from European officials investigating whether carmakers exporting China-made EVs to Europe have an unfair advantage over domestic players, in a sign of the looming regulatory battle between Europe and China as Europe attempts to shield its market from low-cost competition.

While Chinese brands can sell their vehicles in Europe at higher prices than in China and still undercut local pricing, they also face challenges from supply chain bottlenecks to import costs and complex certification requirements.

"There's going to be a major shakeout of Chinese brands in the next 5-10 years," Hein said.

"If someone runs out of steam, they'll be out of the market relatively fast," he said.

(With Reuters Inputs)