Europe’s electric revolution demands affordability, but the Paris Auto Show won’t oblige

The European electric car market looks very healthy at this early stage in its life, but long-term success requires affordable cars and SUVs for average earners and there are few serious competitors at the Paris Motor Show. .

The biennial Mondial de l’Automobile, which opens on October 17 after a 4-year absence due to Covid, offers little to the mass market for electric cars although there will be many expensive new battery electric vehicles, some from China. Some weird electric contraptions will also be on display, but their questionable safety, not to mention pedestrian performance, means they’re not serious contenders.

With forecasts suggesting that up to 65% of new car and SUV sales in Europe by 2030 will be fully electric, mass market sales are crucial. (Western European electric battery market share increased from 2.5% in 2019 to 6.7% in 2020 and 11.2% in 2021 when sales reached 1.2 million. Sales will increase to a just under 1.5 million this year and just over 1.5 million in 2023, according to Schmidt Automotive Research.)

Automotive industry consultants JATO Dynamics said the average price of a new battery-only electric vehicle was €55,821 after tax ($55,000) in the first half of 2022, compared to €48,942 for the whole of 2015. Unless the European car industry sells very cheap electric vehicles. cars, average European citizens will be charged on the bus when entry-level internal combustion engine (ICE) choices have been phased out. This will expose European industry, which is currently taking advantage of European Union regulations. These rules are boosting the sale of high-priced, highly profitable electric cars like Audi, Polestar, Mercedes and BMW, while making it impossible to profitably produce small cars. Chinese manufacturers will take a keen eye.

“In Europe, manufacturers have traditionally focused their production efforts on high-end models and segments, where price sensitivity is low, leading to little progress in reducing the price of electric vehicles in the market and forcing consumers to rely heavily on government incentives,” JATO said in a statement. report.

Professor Stefan Bratzel, director of the German Automotive Management Center (CAM), expects this imbalance to continue as the price of crucial battery components rises. Conventional wisdom had suggested that battery prices were set in a long-term downtrend.

“Due to rising raw material and production costs, EV acquisition costs are unlikely to decline over the medium term,” Bratzel said.

And some of the benefits that electric cars might boast are also evaporating.

“Sharp increases in energy costs and electricity prices are critical in Germany (Europe’s largest automotive market), reducing the cost advantages of electric vehicles over combustion engines. In addition to the slow development of charging infrastructure, rising acquisition and usage costs could jeopardize a rapid ramp-up of the electromobility market,” Bratzel said in a report.

The European Union (EU) is forcing manufacturers to phase out sales of ICE cars by making them unprofitable due to ever-decreasing carbon dioxide (CO2) emissions. Sales of new ICE cars will cease in the EU in 2035 and by 2030 in Britain.

Carlos Tavares, CEO of Stellantis and its huge collection of car brands, from the cheapest small Fiats to exotic Jeeps, Peugeots and Maseratis, said if average citizens sold new cars, it could lead to social unrest.

“I cannot imagine a democratic society where there is no freedom of mobility because it is only for the rich and everyone else will use public transport,” Tavares said in a speech a few years ago. .

With the electric car market share now hovering around 15% in Western Europe and driven by affluent early adopters, affordability is not an issue. But as cheap €12,000 ($11,700) ICE vehicles stop becoming viable, the electric revolution won’t thrive until there’s an equivalent price. Cynics think it won’t happen because European politicians, saying the climate emergency demands it, really want to force mass market drivers off the road and onto public transport or bicycles.

Meanwhile, the industry will continue to unveil impressive but pricey battery electric vehicles (BEVs) at the Paris show. The small Renault 4ever compact electric SUV will make its debut, but despite being small, it won’t be affordable. New, more sophisticated electric vehicles include the Jeep Avenger and the Fisker Ocean. Chinese manufacturers will be present in force and BYD will present the compact SUV, the Atto, the intermediate Tang SUV and the Han intermediate sedan. Great Wall will offer its Ora Funky Cat, while Vietnam’s VinFast will showcase a few SUVs. None of these come close to mass market prices.

There will be some concessions to affordability. Renault will update its little Twizy with the Mobilize Duo, while visitors to Paris will no doubt raise their eyebrows when they see the little Citroën Amis buzzing quietly around town. Citroën will not have a stand at the show. The Microlino recently launched in Italy, like the Twizy and the Ami, is a quadricycle. This means that you do not need a driver’s license and they only have to pass the safety test for motorcycles. The Twizy sells for nearly $12,000 in Britain after tax. The Friend is mainly praised. These vehicles are unlikely to appeal to current buyers at the bottom of the market accustomed to driving vehicles with impressive European safety ratings.

The only seriously affordable EV that’s a real car is the Dacia Spring, where prices start at around €12,400 after taxes in France ($12,000), but that’s after a government subsidy of around €6,000. Dacia is a subsidiary of Renault and is made in China. The Spring has been on sale in Europe for over a year.

JATO Dynamics sees little evidence that this pricing issue will be resolved in Europe and believes this will open the door to the Chinese.

“Consumers are responding to the wider range of electric vehicles available. However (the market) failed to lower prices to meet the demands of low and middle income car buyers. The risk for Western markets is further acceleration from China and new emerging markets which could soon capture a crucial share of the market which has so far been dominated by the industry’s more established (manufacturers) said JATO.

The Paris Motor Show takes place from October 17 to 23 at Paris Expo Porte de Versailles.