European auto industry‑China partnership surge

In July 2026 German officials proposed EU measures to relocate Chinese electric‑vehicle production to Europe, suggesting higher import duties and encouraging joint ventures with Volkswagen to safeguard up to 100,000 jobs. Volkswagen’s CEO considered leasing factory space to Chinese rivals and expanded its stake in Chinese battery maker Gotion High‑Tech, while targeting solid‑state and sodium‑ion battery technologies.

By early August 2026 the narrative broadened to industry‑wide collaborations. Volkswagen announced a joint venture with Chinese EV maker XPeng to co‑develop powertrains and electronic architectures, and deepened ties with Horizon Robotics for autonomous‑driving tech. BMW pursued similar partnerships across software, batteries and AI, reflecting a shift from self‑contained development to shared, cross‑border innovation.

Later in August, Stellantis signaled its own turn to China, exploring joint ventures with Leapmotor and state‑owned Dongfeng to keep factories operating and protect thousands of jobs, exemplified by the under‑utilised Fiat plant in Cassino, Italy. Analysts noted Europe’s lag in e‑fuel production, warning of reliance on imports, while Turkey positioned itself as a new hub for automotive investment, leveraging its supply‑chain links and engineering talent to diversify production away from China.