After the entry of Chinese brands into the electric car market, the large European automobile groups are looking towards lowering the price of their models.
More and more car manufacturers are betting on electric mobility in all areas. However, while the supply of vehicles is high, the same could not be said for demand during 2023. Given this, manufacturers are choosing to offer electric vehicles at a low cost, which is known as the famous price war.
And even more so taking into account the entry of Chinese firms, which have entered the market strongly, setting truly affordable prices compared to the rest of the Western manufacturers. Likewise, it is worth mentioning European aid, among which the MOVES III Plan stands out.
The price war
As we say, European manufacturers have started what is known as the price war, which has given rise to the introduction of Chinese brands into the electric car market. Given this, large automobile groups, such as Volkswagen, Renault or Stellantis, will introduce some models below 25,000 euros to be able to fight against Chinese cars.
Among some of the objectives of this price drop is not only to compete in the race for electrification, but also to offer vehicles that comply with European environmental regulations, as well as to offer a renewed range without carbon emissions.
European automobile groups have arrived late to this war, and that is why they have been forced to offer vehicles at an affordable cost. As a result, Western firms are choosing to launch larger vehicles first, with which they can qualify for a greater monetary margin with which to compensate for large investments.
According to a report from Transport & Environment (T&E), this price war is causing EV sales to concentrate in the largest segments, that is, C, D and E, while smaller electric vehicles (A and B) only represented 23% of electric vehicle registrations in Europe in 2023.
Despite this situation, large groups such as Volkswagen, Renault, Hyundai, Stellantis, as well as Tesla, have realized the great importance of having a presence in the small car segment, since they are the most affordable, as well as the ones people bet the most on.
Small electric cars for 25,000 euros
As a result of this situation, the large groups we mentioned will bet in 2024 on offering small electric cars with prices below 25,000 euros, something that Tesla has already been reporting for a few months.
Stellantis Group
In the case of Stellantis, some of the models that will arrive in 2024 for this price will be the electric Fiat Panda, with a price close to the 25,000 euro range, as well as the Citroën C3, whose price will start at 23,000 euros.
Volkswagen Group
The next group corresponds to the German firm Volkswagen, which will also bring some models for around 25,000 euros, among which a small Skoda stands out, while the arrival of the Volkswagen ID.2 for 25,000 euros is also expected, which will be will be manufactured in Spain.
Looking ahead to the next few years, specifically 2027, an even smaller electric Volkswagen, the ID.2, will be introduced in Europe, which is expected to be below 25,000 euros (it is expected to be around 20,000).
Tesla
Another brand that is putting pressure on Chinese manufacturers is the American Tesla. Elon Musk’s firm has already announced the introduction of the occasional electric car that will cost around 25,000 euros. In this case, the cheap electric car that Tesla is talking about will be marketed between 2026 and 2027, and its price will start at 23,000 euros.
Renault
Renault will arrive in 2025 with a Twingo that will become electric, and whose price will be around 20,000 euros. In 2026 it will continue with the new Renault 5 (between 22,000 and 25,000 euros). For its part, in the case of Opel, it is expected to introduce a new electric model, also for 25,000 euros.
Four electric cars for less than 25,000 euros
According to an analysis by Autoscout24, a portal specializing in second-hand cars, currently only 4% of electric cars sold in Spain have a price of less than 25,000 euros.
As reported by the platform, in the current Spanish market there are only four fully electrified options with a price lower than the mentioned amount. These are the following models:
Dacia Spring Invicta Electric Citroën e-C3 You Yudo 3 Elite
However, it is true that the list of electric passenger cars that are around this price would increase if the current 7,000 euros of aid offered by the MOVES III Plan are subtracted, as well as some of the promotions offered by some brands. In this case, they would enter the list:
Renault Twingo E-Tech MG4 Hyundai Kona EV Fiat 500e MG ZS EV BYD Dolphin Nissan Leaf
The report states that the price factor as an entry barrier to electric cars has been diluted over the months “generation after generation”, and even more so taking into account the “democratization” of this type of technology.
Ignacio García Rojí, spokesperson for Autoscout24, stated: “the technological advances made in recent years, together with the cheaper raw materials that have allowed the cost of battery production to reach a turning point, according to the consulting firm Benchmark “Mineral Intelligence, they draw a very optimistic scenario.”