Europe's carmakers target China's cheap EV edge at Munich car show
By Victoria Waldersee
MUNICH (Reuters) -Europe's carmakers have a fight on their hands to produce lower-cost electric vehicles (EVs) and erase China's lead in developing cheaper, more consumer-friendly models, industry analysts and executives said at Munich's IAA (NYSE:IAA) mobility show.
«We have to close the gap on costs with some Chinese players that started on EVs a generation earlier,» Renault (EPA:RENA) CEO Luca de Meo told Reuters at the car show, adding when manufacturing costs decline, prices will also go down.
De Meo said as part of the French carmaker's drive toward price parity with the Chinese, its R5 EV due out next year will be 25% to 30% cheaper than its electric Scenic and Megane models.
Chinese EV makers, including BYD (SZ:002594), Nio (NYSE:NIO) and Xpeng (NYSE:XPEV) 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.
According to auto consultancy Inovev, 8% of new EVs sold in Europe so far this year were made by Chinese brands, up from 6% last year and 4% in 2021.
About 41% of exhibitors at this year's Munich event are headquartered in Asia, with double the number of Chinese companies attending, including EV makers BYD and Xpeng and battery maker CATL.
«What used to be a performance for the German car industry to demonstrate its extremely strong position is now a meeting of equals between progressive players from around the world, especially China,» said Fabian Brandt of consultancy Oliver Wyman.
The arrival of Chinese EV makers in Europe has raised concerns they will undercut local carmakers and dominate EV sales.
The average price of an EV in China was less than 32,000 euros
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