Chinese electric cars (EV) fit cheaper, while the opposite is in Europe and the United States, according to a report through the consultants of the Jato Dynamics automotive industry.
This will not be unexpected for Ford shareholders, General Motors, Mercedes and Volkswagen, who saw the courses of the actions of ambitious sales objectives for electric vehicles.
Europeans will be more concerned than U. S. buyers because the Biden administration insists EV buyers can claim a $7,500 tax credit if the batteries involve safe parts made in North America and critical minerals sourced in the U. S. U. S.
There is no such limitation in Europe, although the E.U is investigating whether China’s sales of electric cars might require anti-dumping action.
Jato Dynamics said that Chinese electric vehicles continue to increase in advance in their western opposite numbers in their ability to make cars at competitive prices.
“The value difference has expanded, the average retail value of an electric car that must be taken in China now less than part of the value observed in Europe and the United States. In the first part of 2023, and the electric car charges € 31,165 ($ 33,000) in China, € 66,864 ($ 70,700) in Europe and € 68,023 ($ 72,000) in the United States, “Jato said.
“Despite Western’s efforts to produce more affordable electric vehicles, those models continue to outload their gas and diesel equivalents. The United States, respectively, is 92% and 146% more than they would like to pay for the cheapest combustion car you should have. equivalent (internal combustion engine),” Jato said.
“Chinese electric cars are not only at the festival about value, but also in terms of quality and energy. Today, China can produce and sell an electric car with two to three hundred HP for an average of €30,500/$33,150,” the report said.
It cited the BYD Seal – a midsize sedan – with 204 hp in Elite trim in China for just €24,106/$26,197. In Europe, the closest rival in price is a little Renault Twingo Equilibre – a city-car produced in Slovenia – priced at €24,320/$26,430 with just 81 hp.
Renault Twingo combustion version
Meanwhile, the Western Embedding 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 lowered its profit forecast ahead of the week and said it abandoned its goal of building 100,000 electric cars in the 2nd part of this year and more than 400,000 in the first part of 2024, but said when these targets would be restored.
President Joe Biden directed a Cadillac Lyriq while visiting Detroit cars exhibition in Huntington PacaRary.
The Wall Street Journal said GM repeated its EV project.
“It (GM) scrapped EV production targets and said it was slowing its growth plans. It wants time to incorporate engineering changes that should boost the profitability of its production platform,” Heard on the Street columnist Stephen Wilmot said.
“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 conceded having to slash prices to move its EVs and said the consumer adoption rate was lower than expected. Volkswagen has had to cut production of EVs below its earlier expectations.
UBS investment bank underscored the developing monetary dangers to EV systems as application sets, that the relative affordability of electric cars has worsened as ice recovery has 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 Munoz, Global Analyst at JATO Dynamics, said European and U.S. manufacturers need to intensify R&D and cut costs to improve affordability.
“While China is an increasingly influential player in the global automotive arena, its brands are more visual in countries where consumers would not have considered it as a viable alternative. “
“This is a trend that has been driven by the relative affordability of its models in comparison to those produced by its Western peers, and while the U.S. and the EU have responded to the challenge posed by China through major policy decisions, policy alone will not be enough to address the issue of affordability.”
“Western (manufacturers) will have to concentrate on the studies and progression of new technologies and the production procedure designed in particular for a completely electrified future,” Muñoz said in the report.
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