Ferdinand Dudenhoeffer

Tesla and Chinese carmakers showed off their newest electric models at the Munich auto fair, throwing down the gauntlet to their European rivals as competition in the sector intensifies.

The industry-wide shift towards electric vehicles (EVs) was on full display on the opening day of Germany's biennial IAA mobility show, one of the world's largest.

German giant Volkswagen is set to follow Tesla's lead with a high-profile price drop as the battle for global dominance in the electric car segment intensifies, and local challengers race ahead in key market China.