In 2022, more than 2 out of 3 electric cars sold worldwide were either Chinese branded or made in China. In both cases, it amounts in fact to the same thing. And most analysts agree that this hegemony will not change in the years to come, with an estimated 60% dominance of China by the end of the decade. A force that China owes to certain geological advantages, but also to a strategy diametrically opposed to that of Europe or the United States. For us, the electric car must be profitable in terms of price. In China, it can be… by volume.
In China, electric cheaper than thermal
In a long study by Jato Dynamics titled “Affordable EVs and Mass Adoption : The Industry Challenge“, the analyst returns to the crossing of the curves between China and Europe. On the one hand, electric cars that are always cheaper and therefore massively adopted by the general public. On the other, an increasingly high average price that does not meet the expectations of the greatest number.
The average price of an electric car in the first half of 2022 was €55,281 in Europe, and €63,864 in the United States. In 2015, they were €48,942 and €53,038 respectively. According to Jato Dynamics, in Europe, an electric is on average 27% more expensive than an equivalent thermal, and up to 43% across the Atlantic.
But in China, the data is downright reversed. From 2017, electric vehicles became on average cheaper than equivalent petrol vehicles, reaching a low in 2022: €31,829, compared to €66,819 in 2015. Clearly, China has done the exact opposite of Europe or the United States, betting everything on a cheap offer made up of segment A or B city cars and small crossovers with reasonably sized batteries. Currently, the average price of electric cars sold in China is 33% lower than that of a gasoline car.
Did our builders screw up?
Have the European manufacturers got it all wrong? The truth is more complex. China has strategic metal reserves and lithium refining capacity that allow it to have a competitive industry and lower prices for batteries. The cost of labor is also much lower than in Europe or the United States and the purchase bonuses are just as important, Chinese brands were quickly able to offer inexpensive small electric cars. Let’s obviously add safety standards that are sometimes much more lax which allow for lighter and cheaper cars. Something obviously impossible with us, and this explains why the Renault K-ZE was sold for less than €8,000 in China while it is offered in France for more than €20,000.
