Small and medium-sized enterprises (SMEs) in the automotive aftermarket are under increasing pressure to remain competitive while transitioning to circular business models, in line with Dutch sustainability goals.  These SMEs, operating in areas such as auto parts, battery systems, maintenance, and damage repair, are directly affected by this shift. They face dual challenges: adapting their operations to meet sustainability directives and responding to intensified competition from low-cost, imported Chinese electric vehicles (EVs).

The automotive aftermarket in the Netherlands is facing intensified pressure. SMEs operating in areas such as auto parts, battery systems, maintenance, and damage repair are confronted with dual challenges: 

1. adapting their operations to meet sustainability directives, 
2. responding to intensified competition from low-cost, imported Chinese electric vehicles (EVs). 

For SMEs in the automotive aftermarket, the most urgent questions revolve around the lack of understanding of how to survive the changing automotive industry and the strategies to address it. 

This article presents the complex layers of challenges across geopolitics, logistics, technological access, and business models. 

Geopolitical impact

The expansion of Chinese original equipment manufacturers (OEMs) is reshaping the competitive landscape of the European automotive aftermarket. As Chinese OEMs show more presence in Europe, changes in vehicle types, technologies, and supply chains are set to impact diagnostics, maintenance, repair, and parts distribution across Europe, particularly in key transit hubs like the Netherlands.

Since 2022, Chinese OEMs have moved from luxury EVs to more affordable, value-oriented models, increasingly favouring traditional dealership networks to accelerate market entry. Their share of the European EV market is to increase from 11.9% in 2023 to 13.8% by 2030, with strong footholds in Norway, the Netherlands, and the UK. As leasing remains a key adoption driver and Europe becomes the world’s second-largest EV market by 2030, this growing Chinese footprint has broad implications, especially for aftermarket services that must adapt to new brands and technologies. Since Chinese brands entering the European market are fully focused on delivering new vehicles, the warranty period deserves attention for SMEs. Warranty repairs must be performed by the OEM's authorized partners, indicating that limited work beyond “simple” maintenance work is available for the aftermarket. As OEMs only allow original parts during the warranty period, this significantly narrows down opportunities for the aftermarket.

Tensions between the EU and China have escalated over trade fairness. In October 2023, the European Commission launched an anti-subsidy investigation, resulting in provisional tariffs on Chinese battery-electric vehicles, shifting competitive dynamics in the EV sector.

Two challenges

Yet the EU faces two core challenges: maintaining a unified trade policy and reducing reliance on Chinese raw materials and components crucial to the energy and digital transitions.

Additionally, many of Europe’s leading automotive firms are heavily invested in the Chinese market, making retaliatory measures politically and economically sensitive.

“The Dutch weapon that might be used in the geopolitical struggle lies elsewhere: in the recycling centre… researchers are actively working on extracting raw materials like copper, nickel, and lithium from old devices.” (Bostrom, 2025. NOS)

Chinese manufacturers like BYD and Chery have responded to tariffs by increasing exports of plug-in hybrids (PHEVs), which face lower tariffs. BYD sold 3,269 PHEVs in March 2025, up from nearly zero in mid-2024, preserving market presence.

The Netherlands, a key entry point for Chinese EVs, imported €1.1 billion worth in 2023, though most were re-exported. Tariff shifts may reduce imports, forcing the Dutch aftermarket to adapt to changing volumes, technologies, and service demands.

Meanwhile, China is actively developing its own circular economy initiatives for EV batteries, including recycling and reuse. For instance, while the materials used in the batteries are generally similar, Chinese battery manufacturers have been experimenting with different combinations of materials and battery chemistries. 

The rapid growth in the EV market has created a global demand for these materials, leading to fluctuations in prices and supply chain challenges. China's dominance in the battery supply chain has raised concerns about geopolitical risks and the need to diversify supply sources. 

These geopolitical and market developments highlight the urgent need for flexibility and strategic planning in the automotive aftermarket.

Logistics uncertainty

Geopolitical risk and logistics uncertainty are closely connected. The rapid growth of Chinese EVs exports to Europe has introduced not only competitive shifts but also growing vulnerabilities within the European automotive supply chain, encompassing components, battery systems, software platforms, and aftersales services.  

Europe’s dependence on China for critical EV components is a central concern. Chinese manufacturers dominate global production of lithium-ion batteries, rare earth elements, and key semiconductors, all of which are essential to EV production and maintenance. The concentration of these upstream activities within China creates a fragile supply chain that is highly susceptible to geopolitical shocks, export restrictions, or retaliatory trade measures.

On the one hand, the increased tariffs may incentivize Chinese companies to invest in Europe. Many Chinese companies are actively planning to build factories in Europe, shifting their value chains in the coming years. 

On the other hand, Chinese companies also seek to tap into the existing local supply chains. Cases such as CATL in Germany or BYD in Hungary could mean that Chinese companies can build supply chains that benefit European OEMs and the broader EV ecosystem.

As both scenarios indicate shifts in the aftermarket, SMEs in the aftermarket need to timely equip themselves to deal with EVs’ aftersales and integrate “end-of-life” vehicle directive in a circular economy.

Earlier in 2023, Dutch imports of Chinese EVs surged to €1.1 billion, with a substantial portion re-exported to neighboring EU countries. Consequently, any disruption in the flow of Chinese vehicles or components, whether due to tariffs, port congestion, or shifting Chinese industrial policy, can have outsized impacts on Dutch logistics networks.

Moreover, the Dutch EV aftermarket, which relies on consistent access to OEM-approved parts and diagnostic software, may face challenges in servicing the growing fleet of Chinese vehicles if supply continuity is compromised. 

The imposition of EU tariffs on Chinese EVs will lead to significant disruptions in the Dutch automotive supply chain, particularly by increasing import costs, complicating access to critical components, and creating challenges for the aftermarket service industry. 

Technological access or barrier?

An EV consists of approximately 30,000 parts. While current discussions often centre around the battery, which accounts for roughly 40% of a vehicle’s total value, this leaves the remaining 60% of components underexplored in terms of circular opportunities. By embedding circularity across all vehicle systems, the automotive sector stands to not only reduce supply chain risks and resource dependency but also unlock new revenue streams. Therefore, advancing circularity in the EV aftermarket, specifically in spare parts, repair, and electronic components, deserves attention.

For spare parts providers, understanding future provisioning needs is essential. OEMs are typically obligated to guarantee spare part availability and service support for up to ten years. After this period, independent garages usually take over vehicle maintenance. 

In the repair domain, a key question is whether there would be stable, long-term service capacity for Chinese EVs in the Netherlands. It is worth investigating the viability of independent after-sales businesses and whether they can sustainably offer maintenance services outside of OEM domination.

While physical parts may be relatively straightforward to repair or replace, electronic systems, which are often critical to vehicle function, pose more significant challenges. These complex parts are commonly produced not by OEMs but by third-party suppliers. This presents both risks and opportunities: for example, if Chinese EVs use widely available components from third-party manufacturers, independent garages may be able to source and service them more easily. In this respect, reverse engineering could be adopted by SMEs to improve access to such components and enhance their servicing capabilities.

The ability to access, repair, and remanufacture EV components, particularly those sourced from or integrated with Chinese technologies, forms the technical foundation for broader strategic adaptation in the aftermarket. However, technical feasibility alone is not sufficient. As the market continues to evolve and Chinese EV brands gain a stronger presence in Europe, Dutch SMEs must also adapt at the business model level. Shifts in maintenance patterns and supplier relationships demand new ways of creating value. 

Circular business modelling

Traditional business models in the automotive sector, built around servicing internal combustion engine vehicles, are under pressure. EVs require less routine maintenance and use fewer mechanical components, leading to reduced revenue potential for many aftermarket businesses. The complexity of EV components demands new technical expertise and business structures. These shifts urge SMEs to redesign their operational models to remain competitive in the aspects of:

1. extending product lifecycles through reuse, remanufacturing, and repair, 
2. reducing dependency on volatile global supply chains,
3. considering collaboration with Chinese OEMs and other partners. 

In this context, circular business models offer strategic advantages. Beyond environmental benefits, SMEs can reclaim value from used components, stabilize resource flows, and lower costs through shared infrastructure and knowledge. However, these shifts come with challenges, particularly the high upfront investments, the technological complexity of EVs, and the absence of circular design in many current vehicle models. 

In sum, for the Dutch automotive aftermarket, efforts are urgently required to be made in the following key aspects: 

1. Market forecasting focused on Chinese EV imports,
2. Risk mitigation and demand planning based on supply chain scenarios,
3. Enhancing access to technological know-how,
4. Strategic development in circular business modelling.

To remain competitive and contribute to a sustainable transition, SMEs must rethink their current business models, requiring adaptive strategies and shared supply chain responsibilities among various Dutch stakeholders.