Stifled by the fines they will have to pay for excessive CO2 emissions, manufacturers have decided to raise the prices of standard and, allegedly, lower the prices of electric cars. A strange strategy that will benefit affordable rivals like Dacia, and eventually Chinese brands.
We have entered 2025, a very complicated year for the automotive industry. Brands are being forced to sit down with those responsible for creating a strange policy that is already causing chaos across the continent.
Abandoning cars with classic engines and imposing electric cars is a disservice to the European population, even the richest strata. They are already witnessing a significant loss of the residual value of their electric cars, which is also a major disadvantage for the industry and the entire economic system in Brussels. The announced price increase of gasoline cars is not new, but it is common for all brands and is not a surprise, he says Klix.ba.
Lowering the prices of electric cars is not a method, but a real “skill”. Manufacturers know that it is impossible to sell battery models in large quantities, so they want to reach customers in other ways. There is no real drop in prices, but the tactic of electric car manufacturers is to offer better equipped editions, maintain existing prices or raise them minimally, making a significant difference compared to classic vehicles. This of course includes hybrids.
It is hard to believe that any brand will give up profits, so the first step will be to raise the prices of standard cars. The announced increase, from several hundred to several thousand euros, makes electric cars more attractive, but it doesn’t really work that way. Unsold units are a loss and, at the same time, an unrecoverable profit.
The new Škoda Elroq is a perfect example. The compact electric car of the Czech brand is on sale for slightly more than 30,000 euros, with a battery range of less than 400 kilometers and decent standard equipment. Of course, it is the basic version, but it is sold below the price only to avoid European fines for harmful gas emissions.
Elroq is basically a hit, because it is a “serious” piece of car that is sold at a more than decent price and in fact is an example that other brands should follow. If the Czechs are ready to harmonize prices, why couldn’t the others!
The scope of the problem is much larger than it appears. It will be difficult for the brands to achieve the goal they are aiming for, because they will not sell many more electric cars. Buyers will continue to look for more affordable cars, and these are still those with SUS engines or hybrids, even if they are a bit more expensive. This boomerang effect will direct buyers towards Dacia, which is nothing new, or even more towards Chinese brands, making the circle more vicious.
Source: Klix.ba
Photo: Arhiva Autoblog.rs / Dacia / Škoda
Europe blames China for the crisis in the automotive sector, while manufacturers blame the EU
While the European Union accuses China of unfair competition in the car market, European manufacturers criticize the environmental policy of Brussels. In the midst of this crisis, the future of the European auto industry is in great doubt.
The European car industry is facing a new crisis in its recent history. The transition to electrification, accelerated by climate commitments and changing consumer preferences, has exposed structural weaknesses in the sector.
Added to this is the increasingly fierce global competition, led by Chinese manufacturers who have managed to position themselves as leaders in battery technology, including competitive vehicle prices. While the European Union points to unfair competition from China as the main cause, European manufacturers criticize the strict environmental regulations and the transition policy promoted by Brussels.
How does the EU see the situation?
The European Union accuses China of dumping, which involves selling electric vehicles at artificially low prices thanks to generous government subsidies. According to Brussels, this represents a direct threat to European industry, which cannot be equal, he writes Motor.es.
As a result, tariffs were imposed on imported Chinese vehicles, which could temporarily protect European manufacturers. However, these measures could raise the prices of electric cars on the European market, which would affect the end consumer. The attitude of European producers is quite different, because they directly point to the European Union as responsible for the crisis. They believe that EU politicians are not creating a favorable environment for competition, hindering the ability to respond to the Chinese offensive.
Namely, through strict emission regulations that set mandatory emission limits for manufacturers, they are required to drastically reduce CO2, create pressure for rapid electrification and set ambitious goals for the elimination of internal combustion vehicles, increasing production costs.
The crisis is already having visible effects. European consumers face higher prices due to rising technology costs. The average price of electric vehicles produced in Europe is higher than those imported from China. In addition, local manufacturers are reducing the range of models available on the market, while Chinese electric cars are gaining ground thanks to their competitive prices and government support.
Europe is weakening, China is getting stronger
Data show that sales of European-made cars are declining, while imports of Chinese electric vehicles are increasing dramatically. Meanwhile, some reports highlight that several plants in EU countries are facing downsizing or permanent closure, putting more than 50,000 jobs directly at risk.
European car manufacturers have invested in electrification with the belief that the electromobility policy will be consistently implemented. However, they are aware that they have overreached, as well as that the solution to this crisis requires balanced and common measures. On the one hand, the EU could relax some of its climate regulations to give room to local manufacturers to invest in electric cars, instead of having to allocate resources to vehicles with SUS engines that have a shelf life.
The European car industry is at a turning point. While the accusations between the European Union and manufacturers reflect real tensions, the future will depend on the ability of all actors to work together on sustainable and competitive solutions.
It is evident that Europe must adapt if it is to maintain its leadership in the global automotive industry or lose ground to China. The answer to that can only be given by time, although it is running out for local actors.
Source: Klix.ba / Motor.es
Photo: Autoblog.rs Archive / Cupra
Source: autoblog.rs
