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European automakers target China’s cheap electric car advantage at the Munich Motor Show

European automakers target China’s cheap electric car advantage at the Munich Motor Show

A Renault Wallbox charging station is used by a Renault Captur plug-in hybrid car at a dealership in Les Sorinieres, near Nantes, France, October 23, 2020. Picture taken October 23, 2020. REUTERS/Stephane Mahe/File photo Obtain licensing rights

  • The challenge of lowering the costs of manufacturing electric vehicles in Europe
  • Lower costs to bridge the price gap with Chinese electric cars
  • Electric vehicle sales in China accounted for 8% of the European total through July
  • The Renault R5 EV will be 25-30% cheaper than the Scenic/Megane

MUNICH, Sept 4 (Reuters) – European automakers face an uphill battle to produce low-cost electric vehicles and reverse China’s lead in developing cheaper, more consumer-friendly models, analysts and industry executives said at the IAA Mobility fair in Munich. .

“We have to close the gap in costs with some Chinese players who started making electric cars a generation ago,” Luca de Meo, CEO of Renault (RENA.PA), told Reuters at the auto show, adding that when manufacturing costs come down, so will prices. . .

De Meo said that as part of the French automaker’s drive toward price parity with the Chinese, the R5 EV due next year will be 25% to 30% cheaper than its electric Scenic and Megane models.

Chinese electric vehicle makers including BYD (002594.SZ), Nio (9866.HK) and Xpeng (9868.HK) are targeting the electric vehicle market in Europe, where sales rose nearly 55% to about 820,000 vehicles in the first seven months of the year. 2023. Make up about 13% of all car sales.

According to automotive consultancy Inovev, 8% of new electric cars sold in Europe so far this year have been made by Chinese brands, up from 6% last year and 4% in 2021.

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About 41% of the exhibitors at this year’s Munich event are headquartered in Asia, with twice as many Chinese companies participating, including electric vehicle makers BYD and Xpeng and battery maker CATL (300750.SZ).

“What used to be a performance for the German car industry to show its very strong position has now become an equal meeting between progressive players from all over the world, especially China,” said Fabian Brandt of Oliver Wyman consultancy.

The arrival of Chinese electric vehicle makers in Europe has sparked fears that they will undermine local automakers and dominate electric vehicle sales.

The average price of an electric vehicle in China was less than 32,000 euros ($35,000) in the first half of 2022 compared to around 56,000 euros in Europe, according to researchers at Jato Dynamics.

“Europe must stop being naive from a macroeconomic point of view vis-a-vis China,” Gilles Le Burney, Renault’s engineering chief, told reporters on Sunday, referring to the country’s control of the entire battery supply chain.

Mercedes-Benz (MBGn.DE) will offer the compact CLA-class and BMW (BMWG.DE) the Neue Klasse-class, both targeting greater range and efficiency, while cutting production costs in half.

Oliver Blume, CEO of Volkswagen (VOWG_p.DE), told reporters that through its partnerships in China, the automaker aims to cut battery cell costs by 50%.

“We’re going to have to work really hard on cost,” Blum said.

While the automakers inside the show were talking about their green cars, activists from Greenpeace organized a protest over the emissions from their fossil fuel-powered cars still in production.

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The demonstrators dumped three upper sections of cars in an artificial lake in front of the auto show, and held signs that read “The car industry is wasting climate protection” and “Shrink now or sink later.”

($1 = 0.9273 euros)

Writing by Nick Carey. (Reporting by Victoria Valdersee, Jill Gillum and Christina Amann; Reporting by Mohamed for The Arabic Bulletin) Editing by Frederick Hein, Clarence Fernandez and Sharon Singleton

Our standards: Principles of Trust for Thomson Reuters.

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Automotive Correspondent in Germany, covering the industry’s transition to electric vehicles. The impact of the COVID-19 pandemic on the retail sector in South Asia, China and Europe has been previously reported, as well as broader general news. He previously worked for YouGov and Economy, a charity that produces accessible economic coverage.