When electric cars were introduced, the rich couldn’t wait any longer to drive the new cars, without even considering potential drawbacks. This attitude made it simple for the vehicles to penetrate the market in western Europe. However, manufacturers in Europe need to resolve the issues concerning price and driving distance in order to preserve this market. Otherwise, there appear to be far too many negative consequences.
Western Europe has already seen a decline in EV sales, which currently stand at 1.5 million units, or 14.5% of the market. Due to economic uncertainty and problems with the distribution network, this trend is anticipated to remain the same in 2023. However, according to Schmidt Automotive Research, come 2025, sales will see a strong uptick, reaching 2.7 million and accounting for a 20% market share, and will further rise to 9.2 million accounting for a 65% market share as we approach 2030. However, for this to happen, EV technology must be improved so that consumers with average incomes can own electric vehicles.
The European EV sector appears to be trapped in a specialized market for the wealthy and is unable to produce EVs for everyone, as each new vehicle they introduce appears to be powerful with large batteries and unable to compete with ICE-powered vehicles. This is a time when the EV producers in China are planning a major attack on the European market, with their main focus on the midrange to costly segment of the market.
Small SUVs from MG have achieved great success. After taxes, the new MG4 costs around 28,000 Euros or $29,000. When compared to comparable European vehicles, this price is 10,000 euros lower. Newcomers in China are heading upscale to compete with European brands as well. The Dacia Spring is the only cost-effective electric vehicle in Europe, with a starting price of 12,400 euros after taxes, qualifying for a government subsidy of 6,000 euros; otherwise, it will still be expensive. Nevertheless, the Spring is still made in China.
According to the environmental advocacy group Transport & Environment (T&E), European EV producers’ arrogance is endangering the EV sector and raising the possibility of more unemployment for those working in the field. T&E, based in Brussels, claims that EV producers from China will gain 5% of the European BEV market share this year, followed by an increase of 9% to 18% as we approach 2025 and, if nothing is done, companies from outside Europe will soon monopolize the majority of the European market share.
According to Julia Poliscanova, head of T&E, in order to compete with China and America’s swift pace in delivering new models to the market, Europe must develop its own strong trade strategy.
According to experts, a portion of EV manufacturers will not survive, an if Europe delays any further, the aforementioned assault will severely harm its domestic market. American startups such as Fisker Inc. (NYSE: FSR) could also exploit this gap and claim for itself a market share in Europe.
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