Experts say there is little chance of European equivalents of China’s BYD Seagull and Wuling Bingo appearing anytime soon
If European manufacturers do not produce mass-market electric vehicles soon, they will not be able to meet the strict quotas for selling these types of cars and will leave the field open to the Chinese.
Experts say there is little likelihood that any European equivalents of China’s BYD Seagull and Wuling Bingo will appear any time soon. The only hope for the EU and UK automotive industry is a relaxation of rules that will bring internal combustion engines to their imminent demise.
European governments insist that EVs must capture at least 80% of all sales by 2030. By 2024 in Britain, similarly, the share is 22%, rising steadily through 2030 to 80% and to 100% in 2035. In the European Union, a formula based on weight and carbon dioxide emissions will force a similar proportion of sales increases and penalties for failure. This relaxed the rules for 2035 by allowing a limited number of internal combustion vehicles fueled by synthetic fuel.
In the USA, the rules are more flexible, with a requirement for 67% of electric vehicle registrations by 2032. On the other hand, California wants to ban the sale of new internal combustion cars by 2035, making an exception only for plug-in hybrids. .
The European plan assumes that truly affordable EVs are available in large numbers. The problem is that European manufacturers have been dormant during the energy transition, and so models of the type aimed at the working class are not available.
European manufacturers talk about “affordable” new cars starting at around 25 thousand euros, but average earners may well scoff at this idea. Until recently, small combustion cars – such as the Ford Ka, Citroen C1, Peugeot 108 and Renault Twingo – were available for around 12 thousand euros.
To make matters worse, European Union regulations aimed at hurting sales of internal combustion engines have increased starting prices to close to 20,000 euros. And most EV prices start at around 30 thousand euros, with the average being 50 thousand euros.
Small electric vehicles like the BYD Seagull sell for less than US$10,000 in China and could, in theory, be sold in Europe for something close to that amount. They have around 160 kilometers of autonomy and a maximum speed of close to 100 km/h. They can therefore meet perhaps 90% of urban mobility requirements.
These targets are crucial to the future of the European car industry because there are huge penalties for failing to meet them: in the UK, for every sale of a combustion vehicle above the limit there is a fine of £15,000. According to an Autovista report, Ford, Toyota and Nissan are the most exposed in the country. However, there is a complex formula that allows companies that do not meet the targets to buy shares from electric vehicle manufacturers, such as Tesla, according to the European consultancy.
A December report from investment bank UBS predicted sales of 9.6 million in 2030. However, this is expected to be revised downwards following the shakeout in the final quarter of 2023, when Ford, GM, VW and Mercedes had to reassess its plans for electric cars, which, particularly in the US, has led to large inventories of unsold vehicles.
British automotive analyst Charles Tennant wonders whether the bills for the European Union and the United Kingdom are achievable.
“While deep-pocketed early adopters and fleet car users have benefited from tax advantages and taken advantage of EVs, the same cannot be said for mass-market customers, who are being left behind in the race to an electrified future. ”, assesses Tennant.
“Lawmakers should encourage a trend toward incentives for electrics, with research and development tax rebates for manufacturers and purchase price discounts for customers, while progressively increasing taxation on gasoline and diesel. Simply setting targets for electric vehicle sales is clearly only half the equation,” he adds.
The analyst also highlighted that the slowdown in EV sales was only related to high prices, anxiety about autonomy and battery life. But other obstacles have emerged as insurance costs soar, repair services struggle and low residual values undermine leasing finances.
“That’s why policymakers need to rethink the direction of the industry and enthuse mass-market customers to consider an EV before any outright ban on combustion cars,” he added.
Frank Schwope, professor of Automotive Industry at the University of Applied Sciences FHM Hannover, agrees that there should be some dilution in the government calendar until 2035. “Political decisions in Europe in favor of the combustion engine are conceivable to protect the European automobile industry,” he said .
“Over the next few years, a wave of more than twenty Chinese manufacturers will arrive in Europe, of which between five and ten will remain. Market shares between 10% and 15% for Chinese products are realistic,” concluded Schwope.
Julia Poliscanova, Senior Director of Vehicles and Supply Chains at Transport & Environment group, said cheaper batteries, mass production techniques and innovative battery chemistries in Europe would help develop more affordable EVs on the continent.
“Citroën, Renault and Volkswagen have announced even lower-priced BEV models for 2025. The issue is not that producing cheap EVs in Europe is impossible, but that European car manufacturers purposefully abandon the small segment in favor of large cars with greater profit”, pondered Poliscanova.
“I hope that, for the sake of their own survival, they change their strategy, as prioritizing compact EVs in Europe is the best way to avoid a flood of small Chinese EVs. In general, values between 20 thousand and 25 thousand euros in 2025 are an affordable option. Most new fossil cars cost the same. And no one can predict viable innovations or cost reductions by 2030,” added the executive.
Last week, Volkswagen postponed the launch of the ID.2, its €25,000 EV, from 2025 to May 2026. In Germany, Europe’s biggest market, the abrupt end of subsidies for EVs shocked manufacturers.
“According to our projections, 200,000 fewer new EVs will be sold in Germany in 2024,” said Professor Ferdinand Dudenhoeffer, Director of the Center for Automotive Research, based in Bochum, Germany.
Dudenhoeffer said a second shock could be the imposition of punitive tariffs on Chinese imports if the EU confirms that there have been illegal Chinese government subsidies to its industry. This would mean that EV prices in Europe would remain high and demand would weaken.
“It appears that politicians in Europe will become the greatest danger to the future of our automotive industry,” said Dudenhoeffer.
“If policymakers fail to persuade manufacturers to build small city cars and help consumers buy them, an existential threat could devastate European industry as alternative proposals from Asia arrive here en masse, with product performance. and a price that consumers will accept,” added Tennant.
