Chinese electric cars (EVs) fit cheaper, while the opposite is true in Europe and the United States, according to a report through auto industry consultants Jato Dynamics.
This will come as no surprise to shareholders in Ford, General Motors, Mercedes and Volkswagen, who have seen stock prices hit after ambitious sales targets for EVs stumbled.
Europeans will be more concerned than U. S. buyers because Biden’s management insists EV buyers can claim a $7,500 tax credit than if the batteries involve safe parts made in North America and critical minerals from the United States.
There is no such limitation in Europe, although the E.U is investigating whether China’s sales of electric cars might require anti-dumping action.
Jato Dynamics said that Chinese EV manufacturers continue to increase forward their opposite western numbers in their ability to make vehicles at competitive prices.
“The price gap has widened, with the average retail price of an electric car available in China now less than half the price seen in both Europe and the USA. In the first half of 2023, and electric car cost €31,165 ($33,000) in China, €66,864 ($70,700) in Europe, and €68,023 ($72,000) in the U.S.,” JATO said.
“Despite Western’s efforts (manufacturers) to produce more affordable electric vehicles, these models continue to carry more than their gasoline and diesel equivalents. Today, consumers spend € 18,285 ($ 19,500) and € 24,400 ($ 25,800) to buy an electric vehicle in Europe and the United States, respectively, is 92% and 146% in addition to that they would like to pay the cheapest to be had the car of combustion. Matrix compared, in China, the prices of cheaper electric vehicles 8% less than the cheapest ice equivalent (internal combustion motor), “Jato said.
“Chinese electric cars are not only at the festival on value, but also in terms of quality and energy. Today, China can produce and sell an electric car with two hundred to three hundred HP for an average of € 30,500 / 33,150, “the report said.
He cited the Byd seal, a midsize sedan, with 204 hp in elite garrison in China for €24,106 / $26,197. In Europe, the closest rival to the price is a bit of Renault Twingo’s Balance, a city car produced in Slovenia, worth €24,320/$26,430 with 81 hp.
Renault Twingo combustion version
Meanwhile, the Western Retry Competition grants defeat and returns to the drawing board.
Last week, Ford Motor’s stock price dived after it reported big losses from its EV business, citing pressure from a price war sparked by Tesla. Ford also cut production of its Mustang Mach-E and scaled back its £12 billion EV investment plan.
Ford’s EV division more than doubled losses to $1.3 billion in the 3rd quarter, compared with the same period last year.
GM has reduced its previous earning forecast in the week and said it abandoned its purpose of building 100,000 electric cars in the second part of this year and another 400,000 in the first part of 2024, but said when these objectives would be restored.
President Joe Biden drives a Cadillac LYRIQ as he tours the Detroit Auto Show at Huntington Place … [+] Convention Center in Detroit, Michigan on September 14, 2022. (Photo by MANDEL NGAN/AFP via Getty Images)
The Wall Street Journal said GM was rethinking its EV project.
“The (GM) has canceled the EV Production objectives and said it is slowing down its expansion plans. You need time to incorporate engineering settings that accumulate the profitability of its production platform,” said street columnist Stephen Wilmot.
“A slower rollout of electric cars may gain advantages from the company next year, but it weakens GM’s position as a leader in the auto industry,” Wilmot said.
Mercedes admitted to decrease costs to move its electric cars and said that the customer adoption rate decreases than expected. Volkswagen had to decrease EV production under its past expectations.
The UBS Investment Bank stressed the developing monetary dangers for EV systems as applications sets, which the relative affordability of electric cars has worsened as ice recovery increased.
Jato Dynamics said that in the report, the intense cost festival in China had forced its electric car brands to become more effective in order to survive, while the Chinese government has provided “robust” support, with subsidies totaling $57 billion between 2016 and 2022. The discounts had supported sales, while peak electric cars were exempt from sales tax. China’s low hard-labor costs have also helped. The average European hourly wage rate is a little less than 10 times Chinese.
Felipe Muñoz, a global analyst at Jato Dynamics, said that European and American brands want to intensify the R
“While China is an increasingly influential actor in the World Automobile Stadium, its most visual brands in countries where consumers would not have considered a viable alternative. “
“This is a trend that has been driven through the relative affordability of their models compared to those produced through their Western peers, and while the U. S. and EU have responded to the challenge posed through China through primary policy decisions, policy is not sufficient to address the affordability factor. “
“Western (manufacturers) must shift their focus towards the research and development of new technologies and production processes designed specifically for a fully electrified future,” Munoz said in the report.
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