BERLIN, Germany: In the latest step in the entry of the Chinese electric vehicle (EV) giant into the European market, BYD will sell five of its models in Germany at a new showroom in Berlin run by dealership Sternauto.

As awareness of Chinese EV brands is growing among Germans seeking more affordable cars, Sternauto, which has exclusive rights to sell BYD cars in eastern Germany, established the store to get closer to customers.

In an interview with Reuters, Oliver Hein, head of BYD for Sternauto, said, "One of the biggest topics for BYD is that it is not that familiar to German customers."

However, recognition is growing "exponentially" as the brand is investing heavily in marketing, he added.

While most of its sales are still being made in China, BYD, which sold more EVs than Tesla in the fourth quarter of 2023, aims to expand overseas and is constructing production facilities in Hungary, Brazil, and Thailand.

The Chinese EV giant's 2023 net profit is expected to be some 86.5 percent higher than the figure in 2022.

However, in a sign of a potential regulatory battle between China and Europe, which is attempting to shield its market from low-cost competition, Chinese EV makers are under scrutiny from European officials investigating whether Chinese-made EVs exported to Europe have an unfair advantage over domestic products.

Despite facing various challenges, such as supply chain bottlenecks, import costs, and bureaucratic certification requirements, Chinese brands can sell EVs at higher prices in Europe than in China while still undercutting local pricing.

"There is going to be a major shakeout of Chinese brands in the next 5 to 10 years. If someone runs out of steam, they will be out of the market relatively fast," Hein said, adding Sternauto believes that BYD has what it takes to succeed.