It was easy to sell electric cars to wealthy early adopters in Western Europe, who couldn’t wait to turn heads with their sleek new wheels and were content to forget about some of the drawbacks. But if you want to conquer the mass market, the costs are high. dive in and considerations about diversity anxiety want to be addressed.
Failing to address this new market may have existential consequences for European manufacturers.
Electric car sales in Western Europe slowed in 2022 and will stagnate in 2023 at around 1. 5 million and a market share of 14. 5%. This is due to economic weakness and supply chain issues rather than weakening underlying demand. Sales will resume a strong increase, taking them to 2. 7 million in 2025 (20. 0% percent) and 9. 2 million (65. 0%) in 2030, according to Schmidt Automotive Research (SAR). This means that middle-income buyers want to be able to buy an electric car, and the generation wants to satisfy their desires.
The terribly high costs have not bothered those who have so far embraced the electric car revolution. Most of them rate at home and therefore haven’t had to find a public rater who works, isn’t at the end of a long queue, and accepts one of the 10 conceivable paid downloads required for long trips. strange territory.
The European industry does not seem ready for the transition from a niche reserved for the rich to classic shipping for all. Each new electric car launch turns out to offer more strength and diversity with larger batteries, as automakers seek to achieve the impossible: an electric car that performs as well as a car powered by an internal combustion engine (ICE). Electric cars are most productive as urban vehicles for commuting, running errands, and going to school, but they’re useless if you’re making plans that require common public charging. The inevitable result of trying to mirror the functions of ICE cars is higher costs and larger batteries that undermine the company’s overall goal: reducing carbon dioxide (CO2) from cars.
Chinese automaker BYD Seal is displayed at the Paris Motor Show, France, on October 17, 2022. The seal will soon be on sale in Europe. (Photo by Mustafa Yalcin/Anadolu Agency Getty Images)
At the same time, Chinese brands favor a primary attack on Western Europe. The Chinese are targeting the medium and expensive component of the market. There’s no sign of a mass-market target at the moment, but when they do, they will threaten the very core of the European car industry.
SAIC from the Chinese company MG has had wonderful luck with its compact SUVs. The newly unveiled MG4, which starts at around €28,000 after tax ($29,000), is about €10,000 less than European products. Other new Chinese entrants are moving up the ranks and threatening brands such as Mercedes, Audi, BMW and Porsche. This attack is ill-advised, because the high-end sector demands inexhaustible logo power. Excellence combined with nameless logos is not enough
In fact, the only affordable electric vehicle in Europe is the Dacia Spring, which starts at around €12,400 after tax in France ($12,800), but after a government subsidy of around €6,000. Dacia is a subsidiary of Renault and the Spring is manufactured in China.
Are European brands endangering their future by seemingly forgetting the mass market?
Tejas Dessai, an analyst at asset manager Global X, doesn’t think so. But primary brands want to be careful.
“With premium cars having a higher cost, higher margins, and lower production volumes that help reduce overall costs, we expect major automakers to focus on premium EVs in the coming years. Currently, major automakers will have to prove the good fortune of their EV systems to win market trust and bet big on electric cars,” Dssais said in an email exchange.
“Premium electric cars are the safest way to demonstrate validation in the market and most of the generation can be reused for lower-end models. The profits generated by sales in the premium segment will be used to finance advances in the large-scale production of conventional models,” he said. Dessai, based in New York.
The environmental organisation Transport
The Aiways U5 Ion electric SUV, which will be available soon in Europe (Photo via Visual China Group via GettyArray. [ ] Images/Visual China Group via Getty Images)
t
“European car brands have reduced their offer of electric cars at a time when Chinese and Americans are launching new models on the market. If Europe needs to maintain the competitiveness of its auto industry, the EU will have to introduce its own strong trade policy, equivalent to China and the United States’ strong support for electric vehicles. The continent’s climate and jobs are at stake,” Julia Poliscanova, director of T
According to the Association of European Automobile Manufacturers, thirteen million Europeans work directly and in the automobile industry, representing 7% of all jobs in the European Union (EU).
Global X Test said brands want time to all the classes learned from about five years of extensive change.
“Lately we are seeing serious hurdles in the extraction of raw materials, battery generation and software preparation, all of which need to be stabilized,” Dessai said.
The impulse to convince the public, or even to impose it, some would say, runs into annoying obstacles. The value of batteries, which was once headed towards an all-time high of $100 per kWh, has changed course and doesn’t look like it’s going to reverse anytime soon. The current energy crisis, which is increasing the value of domestic electricity, is not doing the electric car market any favours.
Renault CEO Luca de Meo sees imminent price parity between electric cars and combustion engine models.
“I don’t see this parity coming close,” he told reporters at the Paris Motor Show, without specifying a timetable.
He doesn’t agree.
“We think we’re going to get there (the predicted value parity of $100 per kWh) around 2025, when there will be enough generation to reduce battery charging,” Volvo Cars CEO Jim Rowan told Automotive News Europe in the statement. of its new flagship electric SUV, the EX90.
“Technology will increase autonomy. Less batteries, but more autonomy, with less load, we will achieve it,” he is quoted as saying.
But this is a minority opinion, because many charging elements needed to make a battery, such as cobalt, lithium-ion, manganese, and copper, drive up the price. There is some concern about mining situations for workers in some third world countries, and it is recognized that electric cars are far from CO2-free if the production process and recycling are added. There is a growing awareness that politicians and environmentalists are imposing on the public a new, untested generation. Critics say that prematurely abandoning ICE-based hybrid generation would be wasting a long-proven generation, when it could simply provide a less expensive and more effective path to reducing CO2 emissions.
A Wuling Hongguang Mini EV Macaron microcar leaves the meeting line at an Array branch. [+] SAIC-GM-Wuling Automobile on March 30, 2022 in Qingdao, Shandong Province, China. (Photo via Yu Fangping/VCG Getty Images)
In China, the government has been reluctant to bet on any single generation or approach and it is the option where hybrids, plug-in hybrids and even hydrogen may also have a role to play. The best-selling electric car in China, the Hongguang Mini EV made by SAIC-GM-Wuling, is arguably also popular in Europe. The range would be around 125 miles, with a top speed of 65 mph. It has no pretensions when it comes to driving cars over long distances and at high speeds. It is simply a vehicle of practical application, and costs can also start in Europe at around $12,000 after tax if it can also be brought up to European protection standards.
Global
“As their flagship models succeed, we expect most automakers to invest aggressively and enter the mass market and cheap segments. Some car brands will not be successful and we anticipate a reorganization of orders. For example, we may see competitively priced automakers around the world compete aggressively in the low-end market if European manufacturers delay their transition. Dessai said.
“For example, Tata (from India, owner of Jaguar Land Rover), one of the 20 most sensible car manufacturers in the world, is having good luck with its Tiago, which is priced at $11,000. You might see global automakers like Hyundai and Kia. in Korea, Nissan, Mazda, Suzuki in Japan and others competing in markets that didn’t make sense before,” Dessai said.
Dessai said some automakers probably wouldn’t make it, and if the Europeans hold out any longer, this attack will create a big, perhaps fatal, hole in their domestic market.
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