The opening of an investigation by the European Commission into alleged “artificially low prices” of Chinese EVs in Europe has sparked a debate about the role of regional authorities in safeguarding local production.
“Europe needs an affordable and accessible supply of electric vehicles, but only within the framework of fair global competition”, says Julia Poliscanova, Senior Director of Electric Vehicles and Mobility at Transport & Environment (T&E).
“When unfair subsidies are identified, the EU should turn to its own industrial policy and trade defense mechanisms to ensure that the European manufacturing industry has a fair chance,” she explains in dialogue with Mobility Portal Europe.
It’s worth noting that Ursula von der Leyen has criticized the “huge subsidies” received by EVs produced in China, arguing that these benefits exclude European companies from foreign markets and characterizing Chinese subsidies as “predatory practices.”
Read more: De Vries Calls for “Robust Industrial Strategy” to Compete with China Amid EV Boom
EVs less than 25,000 euros in Europe?
In addition to having a “high carbon footprint“, electrified vehicles from China are the only ones that come close to the 25,000 euro price range.
According to T&E, Europe could also profitably produce cars in this price range, although they estimate this may become feasible starting in 2025.
Marie Chéron, responsible for vehicle policies at T&E France, explains: “Bringing vehicles to the market at 25,000 euros or less (without incentives) could change the situation and make these cars more accessible to a larger number of people”.
She adds: “It is essential for these models to become a priority for European manufacturers. It’s also a way to position themselves and be competitive, especially against Chinese competition, which already offers small and affordable EVs in the EU”.
Particularly in France, according to a YouGov survey conducted for T&E, 22% of new car buyers already intend to opt for electric vehicles.
“When offered a small electric car for 25,000 euros, this proportion of potential buyers increases to 35%“, according to T&E.
If these sales were realized, it would result in over 180,000 additional registrations in France.
The main obstacle to achieving this goal is that European manufacturers are focusing on other types of cars that offer higher profitability than compact cars.
Therefore, there is a demand for regional authorities and states to implement regulations that benefit smaller vehicles in the market.
This policy would enable those with lower purchasing power to afford an electric car.
For the stakeholders involved in T&E, these measures should be applied at regional, national, and local levels.
Among the key points, the first involves common criteria to promote this technology, the second relates to reducing the carbon emission tax, and the third includes providing benefits for parking these types of vehicles.
In the case of France, the national government is promoting a social leasing model for leasing compact vehicles priced up to 25,000 euros.
Despite being announced for implementation by the end of September, authorities have confirmed the postponement of this policy until the following year.
Read more: In France, e-mobility would develop “slowly” after eco-bonus removal
