At first glance, Europe’s truck market seems steady, with domestic OEMs commanding more than 90 percent of market share.1 Yet change may be coming. In the past five years, Chinese OEMs have doubled their market share in regions across the world, adding anywhere from 14 to 24 percentage points (Exhibit 1). And while Chinese OEMs today hold less than 1 percent of the truck market in Europe overall, their share of specific commercial vehicle segments is rising rapidly.2 For example, Chinese OEMs hold up to 40 percent of the forklift market across Europe, Middle East, and Africa (EMEA), while their share of the EMEA electric-bus market has grown to almost 30 percent.3
In short, China’s OEM export machine is accelerating, fueled by large domestic manufacturing capacity and the lure of higher-margin export sales in the commercial-vehicle sector as domestic demand slows (between 2023 and 2024, Chinese market demand rose 1 percent while exports grew by 5 percent4). Chinese OEMs produce a total of about 1.1 million heavy-duty trucks annually, or around 400,000 more per year than Europe and North America combined.5 This scale advantage translates into lower manufacturing costs, enabling Chinese OEMs to offer more competitive total cost of ownership (TCO).
Higher profit margins on overseas sales have led many Chinese OEMs to set export targets, with Europe a priority due to its position as a growing battery-electric-vehicle (BEV) market. Several Chinese OEMs have sealed first orders, placed test vehicles, and secured regulatory approval. Entry barriers, once formidable in the diesel era, are now falling, making the European market increasingly accessible to new entrants. Overall, only potential EU local content rules remain as a hurdle to significant Chinese OEM expansion.
How Chinese truck OEMs could expand in Europe
Experience across other industries shows that successful disruptors display their advantage across five dimensions:
- Cost. Chinese OEMs have a structural cost advantage of 30 to 40 percent even under local EU production, driven by significant scale in battery production, faster R&D amortization due to quicker development cycles, and lower overhead costs.6
- Speed. We find that Chinese OEMs’ product development cycles are roughly two times faster (22 to 28 months for Chinese OEMs compared with 40 to 48 months for European incumbents), as a result of steps such as running software simulations in parallel with hardware development and kicking off tooling orders early.
- Innovation. To stand out in a highly competitive landscape, Chinese OEMs actively search for differentiators such as innovative battery-swapping ecosystems, advanced battery packs featuring flash charging, and AI-native smart cockpits.
- Go to market. Chinese OEMs pursue a variety of approaches adapted to specific market situations and unique corporate strengths, such as using lean import and distribution models alongside established independent service partners to quickly gain a market foothold while simultaneously preparing for full local assembly.
- Business models. The value proposition of Chinese OEMs expands well beyond traditional vehicle sales to create integrated energy solutions. For example, bundling electric trucks with solar generation, battery energy storage systems, and charging infrastructure is becoming commonplace.
The net result is that interest in Chinese trucks is rising across Europe (Exhibit 2). Fleet operators make highly rational purchasing decisions based on TCO, and brand loyalty provides little protection: In fact, 27 percent of European truck buyers today consider themselves likely or very likely to purchase a Chinese heavy- or medium-duty truck for their business,7 up from 19 percent in 2025.8
The competitive advantages of Chinese OEMs disruptors are not incidental but enabled by a fundamentally different operating model.9 This approach prioritizes speed and continuous effort to lower costs, characterized by the integration and mobilization of the entire value chain to drive rapid innovation at scale and supported by ambitious performance targets and an execution-focused culture.
Two scenarios for the European truck market
What does this mean for Europe’s truck market and OEMs? Two hypothetical scenarios can help evaluate the potential role of Chinese OEMs in the European medium- and heavy-duty truck (MHDT) market. These scenarios are illustrative, as such a market entry has yet to take place. But they use other commercial vehicle and automotive industries as a proxy to serve as a basis for strategic considerations of incumbent players under a set of specific assumptions: that the broad market entry of Chinese OEMs is increasingly inevitable, that BEV technology will be the entry vector, and that the chosen localization and partnership strategy and ecosystem build-out will determine how quickly market share is captured (Exhibit 3).
- Scenario 1: Competitive share in BEV. Under this scenario, Chinese OEMs successfully establish a solid foothold in the European Union but face headwinds from the slow rollout of charging infrastructure and moderate customer adoption. According to McKinsey analysis, while some 40 percent of customers are willing to switch for a 10 percent price advantage, Chinese OEMs eventually gain a “competitive share” of the transitioning market, or a low double-digit share of the total EU MHDT market. This scenario assumes Chinese OEMs ramp up planned localized production and bypass some local content requirements, allowing them to maintain a 15 to 20 percent price advantage on European competitors. Their ecosystem presence would rely mainly on third-party partnerships for service and for basic financing and leasing offerings, with customer sentiment mostly positive.
- Scenario 2: Radical shift to BEV leadership. In this fully disruptive scenario, an accelerated green transition, a deep local footprint for Chinese players, a fully built-out service network across Europe, and a highly receptive customer base fueled by continued price leadership propel Chinese OEMs to market leadership. They become leading BEV competitors, capturing a robust double-digit share of the total MHDT market by 2035, according to McKinsey analysis. While theoretical, this scenario would be driven by an accelerated energy transition. Ambitious CO₂ targets and industrial policy would drive zero-emission-vehicle adoption, and with no significant new tariffs or localization requirements, Chinese OEMs would establish strong, deeply localized production capacity for both vehicles and components, allowing them to maintain a 30 to 40 percent price advantage. They would establish extensive financing, aftermarket, battery swapping, and digital service offerings, which—when combined with an accelerated rollout of charging infrastructure and strong positive customer sentiment (more than half of European fleet operators consider buying trucks from a Chinese brand)—enables them to secure a leadership position.
How the European industry can remain successful in a radically more competitive market
Using these scenarios as a strategic test, the European industry could consider the following actions to remain competitive—all enabled by a fundamental reevaluation of operating models, drawing on the design role-modeled by disruptor OEMs:
- Develop rigorous cost efficiency. Companies could target relentless cost efficiency to offer a highly competitive TCO. In particular, they could systematically address structural costs through strategic battery sourcing, design-to-cost principles, and modular BEV architectures, all enabled by leaner, faster organizational structures across all functions, primarily capitalizing on AI.
- Build on yearslong customer centricity in Europe. With their deep understanding of the Europe-specific customer and truck application needs, OEMs can identify relevant product and service differentiators. To take advantage of these strengths, OEMs could look to combine focus with speed—accelerating product development cycles by embracing decoupled architectures and a culture of rapid iteration that puts customer-centric software and connectivity features at the forefront. Furthermore, incumbents should focus their initial BEV push where customer demand is highest. A recent McKinsey survey found that buyers are most likely to electrify their regional-haul (51 percent) and last-mile (53 percent) fleets, presenting the most immediate market for European OEMs to defend with competitive, purpose-built electric offerings. While current competition is largely focused on these high-runner segments, long-term success will increasingly depend on greater variant diversity and an attractive overall BEV portfolio.
- Prioritize high-level service and superior uptime. Reliability is nonnegotiable for risk-averse fleet operators, presenting a prime opportunity for European OEMs to fully play out one of their core strengths. By capitalizing on their established, dense, and robust service networks, incumbents can uniquely guarantee rapid availability of parts and 24/7 support. They can further derisk ownership for customers by bundling finance, residual values, and service contracts, and they can use AI to create an unmatched end-to-end digital customer journey.
- Explore strategic partnerships to create competitive scale. To match the speed and scale of global disruptors, European OEMs should continue to pursue collaborative alliances across non-differentiating elements of the ecosystem. By forming broad consortiums or strategic partnerships in areas such as charging infrastructure, battery cell sourcing, and foundational technologies, incumbents can pool resources, share the investment burden, and accelerate innovation without compromising their unique brand identities.
