Automotive Business Magazine – Q2 2026 – Digital edition - Magazine - Page 72
OPI N I O N
LEGAL
An outlook on the
T
he automotive sector
enters 2026 facing
regulatory change,
market uncertainty
and ongoing
geopolitical tension.
Electrification,
emissions compliance
and shifting supplychain structures continue to
shape operational and legal
priorities across the industry. In
this article, Birketts considers
the implications for fleet
operators, brokers, retailers and
mobility providers.
The rise of Chinese
EV manufacturers
Chinese electric vehicle (EV)
manufacturers are expected to
play a significant role in global
automotive developments
during 2026. Analysts predict
that China’s domestic electric
car market will experience
slower growth this year,
prompting manufacturers
to continue expanding into
overseas markets.
Over the past decade, Chinese
manufacturers such as BYD,
Chery and Leapmotor have
expanded their presence across
Europe. Reports describe this
expansion as being underpinned
by structural cost advantages,
including battery supply chain
efficiencies and localised
production strategies that
support competitive pricing.
These developments are
occurring alongside the
EU’s continued efforts to
decarbonise road transport,
which has increased demand
for affordable electric vehicles.
European manufacturers have
faced higher production costs
and limited battery capacity,
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AUTOMOTIVE BUSINESS
Q2 2026
creating space for Chinese
entrants to supply competitively
priced electric vehicles to the
European market.
China continues to progress
more rapidly in the shift to
electric vehicles than Europe or
the US, and this has increased
competitive pressure on
established manufacturers
operating in the European
market.
Additional analysis predicts
that competition in Europe will
intensify in 2026, as Chinese EV
brands work to expand their
sales networks and strengthen
their distribution capability.
Evidence also suggests
that Europe is increasingly
engaging with Chinese EV
and battery manufacturers,
with partnerships emerging
in response to the competitive
pricing and technology offered
by Chinese firms.
These developments suggest
that Chinese brands may
become more prominent options
for fleet buyers and retail
customers.
Future market conditions
will depend on regulatory
developments, including tariff
measures and evolving software
security rules governing
imported vehicles, although
any such changes will need to
be monitored as they progress
through formal legal and
political processes.
Strengthening of the
used car market
Trade reporting indicates
that the UK used car market
has entered 2026 in a strong
position. According to data
from Autotrader, consumer
engagement remains high,
retail prices have risen and
transaction volumes have been
robust at the start of the year.
This resurgence follows
several years of volatility. Used
vehicle prices rose sharply
during the semiconductor
shortages of 2021 to 2023,
before stabilising through
2024 and 2025. Early 2026
data suggests renewed
strengthening, with further
indicators emerging from
market intelligence reporting.
For example, January 2026 saw
growth in new car registrations
driven by alternatively fuelled
vehicles, even as petrol and
diesel registrations declined.
Separate auction data shows
that average used car values
increased in January 2026,
with the highest monthly values
recorded since October of the
previous year, reflecting strong
buyer engagement.
The combination of economic
pressures and mixed consumer
confidence in new vehicle
purchases – particularly relating
to electric vehicles – appears
to be contributing to continued
demand across all fuel types in
the used car market.
The latest reporting does not
yet determine how used EV
pricing will evolve throughout
the year, but the potential for
fluctuations remains, linked
in part to broader global EV
market sentiment.
From a legal risk perspective,
rapid changes in used
car valuations increase
the importance of clear
and accurate advertising.
Where prices shift quickly,
businesses must ensure that
representations about value,
vehicle condition and pricing
