Western automakers want to cut the cost of electric vehicles to counter Chinese brands
CTOnews.com, July 27 (Xinhua)-- European and American automakers are worried about China's cheap electric cars "invading" Europe, Reuters reported. French carmaker Renault said today it plans to cut production costs of its electric cars by 40 per cent to counter Chinese brands.
▲ source Pexels Renault CFO Thierry Peyton (Thierry Pieton) said that the best way to resist price competition is to cut their own development and manufacturing costs.
While the target of cutting costs by 40 per cent will not be achieved until 2027, Renault CEO Luca de Mayo (Luca de Meo) said it would start significantly reducing production costs in the second half of this year because of lower raw material costs. "it is clear that we are in competition and time is crucial," he said. "
The provision of electric vehicles affordable to ordinary car owners has become a priority for global carmakers, which are generally more expensive than fuel vehicles because of the high cost of batteries.
Chinese manufacturers such as BYD and SAIC have invested heavily in this shift, taking advantage of lower labour costs and local battery suppliers to stay ahead of many competitors. According to Inovev, a consultancy, Chinese carmakers will account for 9 per cent of the European electric vehicle market in 2022, nearly doubling from the previous year. And the pace is accelerating.
Like other electric carmakers, Renault is under pressure from the United States. Tesla has cut prices several times this year, even though it has eroded its profit margins.
Carlos Tavares, CEO of Stellantis, warned yesterday that competition with Chinese manufacturers would be "extremely brutal": "the competitive costs of Chinese manufacturers are 25 per cent lower than ours and we have to fight. We need to reduce costs to ensure that we continue to make profits at prices affordable to the middle class."
Mr Tavares said western carmakers needed to use "the same weapons" as their Chinese competitors, procure components in lower-cost countries and build partnerships with battery suppliers that offer the best combination of energy, cost and weight. "this means that we need to provide a procurement plan so that we can sell cars such as Citroen C3 at 25000 euros (CTOnews.com Note: about 198000 yuan currently) or less," he said bluntly. "
