BarcelonaThe industry is already talking about “the winter of the electric car” and European car manufacturers are preparing to survive this period. Companies on the continent are planning to produce dozens of affordable electric models next year, pushed by new European Union (EU) carbon emissions targets and increasingly fierce competition from China. According to the newspaper Financial Timesahead of this week’s Paris Motor Show, major European manufacturers are concentrating on regaining lost market share with new vehicles.
Barclays analyst Henning Cosman estimates that global automakers will launch more than 100 electric vehicle models this year in Europe and around 70 by 2025. Even so, the expert tells the British rotary that cheaper prices, needed to reach desired sales levels, could lead to an “electric car winter”. “If you’re a consumer, you almost feel like buying an electric vehicle today is a mistake because you know you can get a better one with more range and newer technology and most likely at a lower price very soon. That’s really the downward spiral,” he adds.
Pressure on industry will increase again next year when new EU emissions targets come into effect. This will require car manufacturers to reduce the carbon emissions of their fleets by increasing the proportion of electric and hybrid vehicles. If they don’t, they will face huge fines, he reminds Financial Times.
Towards the price war
“There could be a price war, but I’m not sure that the Europeans are in the best position to win it,” says AlixPartners consultant Alexandre Marian. Industry-wide gross margins for electric cars are about 15 percentage points lower than for combustion engine models, according to Barclays. However, some cheaper models will already be shown at the Paris Motor Show, including a sub-€20,000 car made by Leapmotor, Stellantis’ Chinese partner.
As the British newspaper explains, Renault is already starting to accept orders for its electric R5, with a price of around 25,000 euros. On the other hand, Citroën will show models such as the compact SUV C3 Aircross, although only the non-electric versions have a price of around 20,000 euros. According to data collected by Renault, EU car manufacturers will need a 20% to 22% share of the European market to meet emissions targets. At the moment, however, they remain stuck below 15%.
