Europe’s Electric Revolution Demands Affordability, But Paris Car Show Won’t Oblige

Transportation Europe’s Electric Revolution Demands Affordability, But Paris Car Show Won’t Oblige Neil Winton Senior Contributor Opinions expressed by Forbes Contributors are their own. Following New! Follow this author to stay notified about their latest stories. Got it! Oct 16, 2022, 07:13am EDT | New! Click on the conversation bubble to join the conversation Got it! Share to Facebook Share to Twitter Share to Linkedin Renault Mobilize Duo Renault Europe’s electric car market looks very healthy at this early stage in its life, but long-term success requires cars and SUVs that are affordable for average wage-earners and there are few serious contenders at the Paris Motor Show.

The biennial Mondial de l’Automobile , opening October 17 after a 4-year absence because of Covid, offers little to the electric car mass market although there will be many expensive new battery-electric vehicles, some from China. Some weird electric contraptions will also be on show, but their questionable safety, not to mention pedestrian performance, means they aren’t serious contenders. With forecasts suggesting up to 65% of new car and SUV sales in Europe by 2030 will be all-electric, mass market sales are crucial.

(West European battery-electric market share has zoomed from 2. 5% in 2019 to 6. 7% in 2020 and 11.

2% in 2021 when sales hit 1. 2 million. Sales will advance to just under 1.

5 million this year and just over 1. 5 million in 2023, according to Schmidt Automotive Research . ) Auto industry consultants JATO Dynamics said the average price of a new battery-only electric vehicle was €55,821 after tax ($55,000) in the first half of 2022, up from €48,942 in all of 2015.

Unless the European automotive industry sells seriously cheap electric cars, average European citizens will be priced on to the bus when entry-level internal combustion engine (ICE) choices have been eliminated. This will expose the European industry, which is currently cashing in on European Union regulations. These rules spur the sale of high-priced, high-profit electric cars from the likes of Audi, Polestar, Mercedes and BMW, while making it impossible to produce small cars profitably.

Chinese manufacturers will be casting a covetous eye. “In Europe, manufacturers have traditionally focussed production efforts on premium models and segments, within which price sensitivity is low, resulting in little progress in reducing EV prices across the market, and causing consumers to rely heavily on government incentives,” JATO said in a report. MORE FOR YOU They Inherited Billions Upon Billions: Meet America’s Richest Heirs Kingston’s IronKey Keypad 200 USB Drive Should Be Compulsory For All Government Departments The Culture Around Tech Is Changing As Employee Expectations Evolve Microlino electric bubble car (Photo by TOBIAS SCHWARZ/AFP via Getty Images) AFP via Getty Images Professor Stefan Bratzel, director of Germany’s Center of Automotive Management (CAM) , expects this imbalance to continue as the price of crucial battery components increases.

The conventional wisdom had suggested battery prices were fixed in a long-term downward trend. “Due to rising raw material and production costs, it is unlikely that the acquisition costs for electric vehicles will fall in the medium term,” Bratzel said. And some of the advantages that electric cars could boast are evaporating too.

“The sharp rise in energy costs and electricity prices are critical in Germany (Europe’s biggest car market), which reduces the cost advantages of electric vehicles compared to combustion engines. In addition to the sluggish development of the charging infrastructure, the rising acquisition and usage costs could jeopardize a rapid market ramp-up of electromobility,” Bratzel said in a report The European Union (EU) is forcing manufacturers to gradually end ICE car sales by making them unprofitable through ever-tighter carbon dioxide (CO2) emissions. Sales of new ICE cars will cease in the EU in 2035, and by 2030 in Britain.

Carlos Tavares, CEO of Stellantis and its huge collection of automotive brands from the cheapest little Fiats to Jeeps, Peugeots and exotic Maseratis, has said if average citizens are priced out of new cars this could lead to social unrest. “I can’t imagine a democratic society where there is no freedom of mobility because it’s only for wealthy people and all the others will use public transport,” Tavares said in a speech a couple of years ago. With the market share of electric cars now at around 15% in Western Europe and driven by well-off early adopters, affordability isn’t a problem.

But as cheap, €12,000 ($11,700) ICE vehicles cease to become viable, the electric revolution won’t prosper until there is a price equivalent. Cynics think this won’t happen because EU politicians, saying the climate emergency demands it, really want to force mass-market drivers off the road and on to public transport or bicycles. Meanwhile, the industry will continue to unveil mightily impressive but pricey battery electric vehicles (BEVs) at the Paris show.

The little Renault 4ever compact electric SUV will debut, but although it’s small it won’t be affordable. New fancier electric vehicles include the Jeep Avenger and Fisker Ocean. Chinese manufacturers will be there in force and BYD will show the compact SUV, the Atto, the Tang mid-size SUV and the Han midsize sedan.

Great Wall will offer its Ora Funky Cat, while Vietnam’s VinFast will showcase a couple of SUVs. None of these are close to mass market prices. Citroen Ami is quadricycle and can be driven without a license in France from the age of 14.

(Photo . . .

[+] by Abdulmonam Eassa/Getty Images) Getty Images There will be some sops to affordability. Renault will update its tiny Twizy with the Mobilize Duo, while visitors to Paris will no doubt raise their eyebrows when they see little Citroen Amis quietly buzzing around town. Citroen won’t have a stand at the show.

The recently launched Microlino from Italy, like the Twizy and Ami, is a quadricycle. This means you don’t need a driving licence, and they only have to pass the safety test for motorcycles. The Twizy sells at close to $12,000 in Britain after tax.

The Ami is mainly leased. These vehicles are unlikely to appeal to current buyers at the low end of the market used to driving vehicles with impressive European safety ratings. The only seriously affordable electric vehicle which is a proper car is the Dacia Spring, where prices start at about €12,400 after tax in France ($12,000), but that’s after a government subsidy of around €6,000.

Dacia is a subsidiary of Renault and is made in China. The Spring has been on sale in Europe for more than a year. Dacia Spring (Photo by ERIC PIERMONT/AFP via Getty Images) AFP via Getty Images JATO Dynamics sees little evidence this pricing problem will be solved in Europe and reckons this will open the door to the Chinese.

“Consumers are responding to the broader range of available EVs. However (the market) has failed to bring down prices to satisfy the demands of car buyers on lower and middle incomes. The risk for Western markets is further acceleration from China and newer emerging markets that could soon acquire a crucial portion of the market which has until now been dominated by the industry’s most established (manufacturers),” JATO said.

Mondial de l’Automobile runs from October 17 through October 23 at the Paris Expo Porte de Versailles. Follow me on Twitter . Check out my website .

Neil Winton Editorial Standards Print Reprints & Permissions.