Europe's top car manufacturer Volkswagen presented a series of more affordable electric vehicles Monday as Chinese EV titan BYD said it would start producing a cut-price model on the continent.

The duelling announcements at the closely-watched Munich auto show highlight the fierce battle shaping up between Europe's traditional automakers and fast-growing Chinese rivals.

VW -- along with peers BMW and Mercedes-Benz from the long troubled German auto sector -- are seeking to make up lost ground in the race for electric dominance.

Volkswagen unveiled four small EV models from its namesake VW brand, as well as its Cupra and Skoda marques.

With starting prices of around 25,000 euros ($29,000), lower than many current EVs made by European manufacturers, their commercial launch is set for next year.

But at a press event at the IAA Mobility show, which runs the whole of this week, CEO Oliver Blume conceded that VW faced a tough fight.

"The automotive industry, and especially the Volkswagen group, has never faced so many headwinds at the same time," he said.

And he conceded that the situation in China, where VW has lost market share to local rivals, was highly competitive.

BYD "without a doubt is doing a great job there," he said.

- Resistance to EU ban -

BYD meanwhile announced that its Dolphin Surf electric compact car, already on sale in Europe since May for around 20,000 euros, will be produced from the end of 2025 in its new Hungarian factory.

"We are almost ready to build our cars in Europe, for Europe," said the manufacturer's executive vice president Stella Li.

Building its cars in Hungary, an European Union country, should help the Chinese manufacturer avoid hefty EU tariffs the bloc has slapped on Chinese-made EVs over what Brussels says are unfair state subsidies.

Germany's top automakers have all suffered in recent times due to weak demand and fierce competition in key market China, where BYD and others have eroded their sales.

RTL

Chinese EV maker BYD is seeking to expand in Europe / © AFP

They have struggled with the shift to EVs as demand has proven weaker in Europe than many had anticipated and prices remain too high for many motorists.

Calls have meanwhile been growing for the EU to review a plan to end sales of new combustion engine vehicles by 2035 as part of efforts to tackle climate change.

Stellantis, whose brands include Jeep and Fiat, as well as BMW and Mercedes have all expressed scepticism or outright opposition to the plan.

Volkswagen's Blume added his voice to the criticism on Monday, saying that it was "unrealistic" to aim for "100% electric mobility" in a decade.

"We need reality checks every year," he said.