European car manufacturers are considering lowering their EV car prices as China leads the race to develop cheaper and more consumer-friendly models at the Munich car show. Major EV car manufacturers think that they will need to lower their prices to close the gap with Chinese manufacturers. For the prices to go down, the manufacturing costs must decline.
Luca de Meo, the CEO of Renault, stated,
“We have to close the gap on costs with some Chinese players that started on EVs a generation earlier.”
He also added that as a part of competitive pricing with Chinese EV cars, Renault’s R5 EV will be 25-30% cheaper than its Scenic and Megane EV models. The Renault R5 EV is due out next year.
According to Reuters,
“Chinese EV makers, including BYD (002594.SZ), Nio (9866.HK) and Xpeng (9868.HK) are all targeting Europe’s EV market, where sales soared nearly 55% to about 820,000 vehicles in the first seven months of 2023, making up about 13% of all car sales.”
China’s EV manufacturer, Xpeng, is considering expansion to more European markets in 2024. Furthermore, another manufacturer, Zhejiang Leapmotor Technology, is about to come up with five EV models for its overseas market (Europe included) in the next two years.
According to Inovev, an auto consultancy, of all the EVs sold in Europe so far in 2023, Chinese EVs covered 8%. The rate was 6% in 2022 and 4% in 2021. Furthermore, almost 41% of the exhibitors at Munich’s car show have their headquarters located in Asia. In addition to that, the number of Chinese companies attending the show doubled.
Hildegard Mueller, the president of the German Association of the Automotive Industry (VDA), talked about the need for Germany to invest more in electric cars. This is because of the high pressure of international competition.