The European automotive industry in general and green lobbyists in particular say affordable electric vehicles are the key to success as sales move from mainly well-heeled first adopters and business buyers to the mass market.
The challenge is that the cheapest costs will have to be at least part of the current point of around 25,000 euros after taxes ($27,000), described decidedly as “affordable” by industry leaders. There is concern for the long-term health of the European car industry that Chinese manufacturers can do even more than that now, with small city cars like the BYD Seagull starting at around 10,200 euros ($11,000).
According to French car consultancy Inovev, the Seagull was the eighth most promoted electric vehicle in China last year, with just under 300,000 units sold. The similar small Wuling Bingo has sold over 250,000 copies.
BYD did not respond to questions about the Seagull’s arrival in Europe, but observers say it may not be long, given the growing gap in the market. They say a cooperation deal with a suffering European could cushion the blow to local carmakers and make it fit for the EU.
You could say that affordable doesn’t really matter because Europeans are unlikely to adopt the reasonable and cheerful little Chinese electrical boxes. But unfortunately for European industry, the European Union has decreed that internal combustion engines will have to pass and its citizens will buy electric vehicles whether they like it or not, and those little Chinese electric vehicles are probably the only ones affordable. Electric vehicles will have to represent around 80% of new car sales in Europe until 2030 and one hundred percent until 2030.
European manufacturers are starting to worry about the implications if they fail to meet this Chinese competition. That’s not surprising because it’s an existential problem. Can “Airbus for Autos” solve the problem?
The news firm Bloomberg reported Tuesday that Volkswagen, Renault and Stellantis were studying the option of forming alliances with what it called “sworn” competition to counter this threat. As Renault is threatened through multi-brands VW and Stellantis, it may simply turn to its current reasonable electric vehicle supplier, China’s Dongfeng Motor Corp, which has just introduced the new Nammi brand.
Renault CEO Luca de Meo wants to see a Europe-wide alliance, an “Airbus of Autos” he called it, which would help share the huge cost of building cheap EVs. Airbus is a pan-European plane-maker set up to compete with Boeing, but which has been accused of using excessive government subsidies. It’s unlikely that Renault’s competitors would be happy about helping to solve its lack of scale.
According to reputable forecasters such as investment researcher Jefferies, European electric car sales will rise from 2 million in 2024 to just under nine million through 2030. Investment bank UBS now predicts nine. 6 million electric cars in Europe through 2030. Schmidt Automotive Research predicts 8. 4 million electric cars in Western Europe. until 2030 for a market percentage of 60%. This great expansion implies the imminent emergence of a mass market.
In a report published this week, Brussels-based green advocate Transport and Environment criticized the European industry for being too keen on selling high-price and therefore highly profitable monster electric EVs.
“Automakers are slowing the adoption of electric cars by prioritizing larger, electric cars,” T said.
Chinese electric cars for export. (Photo by STR/AFP via Getty Images)
“European carmakers are holding back the mass market adoption of EVs by not bringing affordable models to consumers faster and at volume. The disproportionate focus of manufacturers on large SUVs and premium models means we have too few mass-market cars and too high prices,” said Anna Krajinska, vehicle emissions manager at T&E.
T&E listed upcoming launches for “affordable” EVs including the Fiat e-Panda (€25,000-$27,000), Skoda Elroq (€25,000), Citroen e-C3 (from €23,300), and the Hyundai Casper (€20,000) in 2024. In 2025 comes the Renault Twingo (€20,000-$21,600). The VW ID.2 (€25,000), Opel €25,000, and Renault R5 from €22,000 launch in 2026. The VW ID.1 takes a bow in 2027 at €20,000.
These prices are too high to allow the emergence of a mass market in EVs. EU CO2 regulations have priced out of the market little ICE cars like the Fiat 500, Ford Ka, Citroen C1, Peugeot 108, SEAT Mii, and Renault Twingo, which started at close to €10,000.
The EU must find some way to incentivize the production of cheap urban runabouts, or drastically dilute its CO2 rules. These little cars are likely to have a range of about 100 miles, a top speed of 60 mph, room for 2 adults and 2 children, ideal for shopping, school runs and local commuting. Range anxiety would be a thing of the past because long journeys are clearly not on the cards.
Prices of these upcoming European-made (or procured) EVs are not affordable to Europe’s average wage earners.
“I recognize that those values are not. One car is a Dacia Sandero (an ICE vehicle) that starts at 11,300 euros (£12,200) in Germany, which is part of the value of those “electric vehicles,” said Matt Schmidt of Schmidt Automotive Research. .
Dacia is the French logo of Renault and sells the Spring EV for almost 20,000 euros through Dongfeng, before incentives. This is the cheapest electric vehicle in Europe.
Schmidt said it was not unexpected that major European brands would focus on high-end cars because they want to generate budget to make more affordable electric cars for the mass market. A lot of rationalization is needed, but don’t expect a truly affordable European EV before 2030.
Renault CEO Luca de Meo wants an Airbus for Autos. (Photo by Daniel LEAL / AFP) (Photo by DANIEL … [+] LEAL/AFP via Getty Images)
“We don’t expect truly affordable mass-market models to come to market until the end of the decade. We expect protectionism to create roadblocks for Chinese manufacturers attempting to enter in the meantime and leverage their early advantage domestic scaling advantages,” Schmidt said.
EV lobby organization inFocus disagreed with T&E’s complaint about brands focusing on big-profit EVs, saying it was not unexpected that some consumers would look for more expensive vehicles. In its latest newsletter, EV inFocus said EU regulations on fuel efficiency, vehicle taxes and weight-penalizing subsidies were needed to convince buyers to look at smaller cars. He highlighted the difficulty European carmakers have in competing with Chinese electric vehicles.
Peugeot e-2008 compact SUV
“However, those cars have to be available. All-electric cars or crossovers can be purchased from Peugeot, Mini, Opel, Citroen, Hyundai, Kia, Mazda, Jeep and Honda, as well as Chinese or China-related brands, such as BYD, MG, Seres, Smart and Volvo, said Peter Ramsay of EV inFocus.
None of them can compete simply on value with BYD Seagull or Wuling Bingo.
Sales of electric vehicles have increased over the past four years, but expansion has stumbled. The ambitious plans of GM and Ford in the United States, as well as VW and Mercedes in Europe, have been scaled back. As China ramps up sales in Europe, the level is set for a price war, said Al Bedwell, an analyst at GlobalData, which could end up reaping benefits in electric vehicle sales.
“The ingredients are there for a price war of sorts. It may not be on the brutal scale seen in China, where plug prices in some cases have been reduced to parity with ICEs, but it will help scale vehicles. ” electrical”. Bedwell said.
Bedwell said this would lead to the arrival of several “affordable” electric cars in Europe at between 20,000 and 25,000 euros, compared to the average value of 40,000 euros ($43,200). He is positive about sales in 2024, even if expansion has slowed. .
If this is the extent of price cuts, then the outlook for European manufacturers will be dire. Could EU tariffs slow Chinese incursions? Given the likelihood of harsh retaliation from China which would devastate German interests there, penal tariff action seems unlikely.
Policy adjustments in Europe will depend on the EU’s commitment to its CO2 regime. It turns out that the choice is between keeping the ECI ban in place until 2035, preventing large numbers of its citizens from owning a new car, or bankrupting the masses. European automobile industry. Or allow China the freedom to supply electric, cheerful and cheap city cars that simply do the same thing, and at least maintain the mobility of its citizens.
Could “Airbus for Autos” save the situation?
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