The high prices of electric cars in Europe help the penetration of Chinese cars due to lower prices.
The European Court of Auditors (ECA) issued a warning to automakers that make electric cars that meeting the environmental target set for 2035 is almost impossible to catch unless the prices of EVs are reduced.
After all, in recent months the electric car sector in Europe has seen a drop in sales, raising concerns about future sustainability targets. It is known that many countries in Europe have abolished subsidies, driving corresponding sales to a very low level. The high prices of electric cars in Europe help the penetration of Chinese cars due to lower prices. According to the International Energy Agency (IEA), the share of vehicles imported from China will reach 17% in 2022 from 12% in 2021. Another important fact is that more than 60% of electric vehicles (EV ) sold in China in 2023 were cheaper than the average price of internal combustion engine (ICE) cars, while EVs in Europe remain 10% to 50% more expensive than conventional ones.
According to the European Court of Auditors (ECA) study, despite major emission restrictions and the introduction of newer and innovative engine technologies, most conventional cars still emit a large percentage of CO2, at a similar level to what it was 12 years ago. In addition, plug-in hybrid vehicles (PHEVs) are not so environmentally friendly. According to tests, hybrid models emit up to 250% more emissions on the road than listed at factory prices, and alternative fuels still have a long way to go before they become affordable and mass marketed.
Without government subsidies, the average price of an EV in Europe rises significantly, while the average cost of a battery is €15,000.
Europe needs to increase battery production to be able to lower electric car prices. Today, it accounts for less than 10% of global battery production, while China accounts for 76% of global production. So it is highly dependent on other regions to secure the minerals needed for batteries. For example, 87% of raw lithium is sourced from Australia.
Finally, the increase in imports from China can have devastating effects on European electric vehicle manufacturers, while a great deal of effort must be made to implement similar charging infrastructure in all European countries. As a solution to the issue, the European Court of Auditors (ECA) states that Europe should be able to produce electric vehicles on a large scale and at competitive prices, while it should be active in securing the minerals used in the production of batteries, while improving charging infrastructure across the continent.
