European carmakers rely on cross-continental partnerships to compete in low-priced EV race

Nuying Huang, Taipei; Peng Chen, DIGITIMES Asia 0

Credit: AFP

The competition of EUR20,000 (US$21,750) EV has mobilized the European automotive supply chain. Local automakers tend to collaborate with partners to gain a foothold in the sector. However, partnerships built across continents seem more promising than those formed within Europe.

Suppliers said the two drivers are behind establishing Europe's low-priced EV supply chain. First, the act could become a defense against China-made EVs' entry into the market and expedite European car companies' development in the segment. The low-priced EV will satisfy consumers' needs for the vehicle more rapidly and help carmakers reach their carbon emissions reduction goals.

However, European automakers cannot cut their production costs substantially within a short time. This is why they have worked with partners. The collaboration between Volkswagen and Renault for a EUR20,000 EV platform was the most remarkable case before the pair called off the project. They will build their vehicle platforms separately.

Media reports said the cooperation's failure means the duo missed a great opportunity. European carmakers could reach economies of scale quickly because they are familiar with local regulations and unions. It is time for them to set aside rivalries and accelerate unity.

Once Volkswagen and Renault build their low-priced EV platforms separately, they will compete directly in the future. Volkswagen might need another two years to build its small vehicle platform. Chinese EVs will likely secure a certain amount of market share by then.

The collaboration between Volkswagen and Ford has progressed smoothly. Volkswagen is willing to let Ford build Europe's first compact battery EV, Explorer, on its MEB platform. Production of the vehicle will start soon, representing a win-win.

European automakers have seen their trans-continental partnerships advance. Volkswagen has tied up with China-based Xpeng for the Chinese market. Renault's Dacia Spring, made in China by the French carmaker's partner, has a starting price of more than EUR20,000 in France.

Stellantis has launched its EUR25,000 e-C3, a BEV. Through a partnership, the company will also introduce the T03 EV from China-based Leapmotor to Europe. Leveraging Stellantis' sales channel in Europe, the T03 will be available on the continent in September 2024.

BYD's large-scale entry into Europe also has drawn the market's attention. The Chinese EV giant plans to launch a EUR20,000 Seagull model in Europe.

Europe is experiencing a less notable EV demand growth because of the unavailability of charging piles and the insufficient driving range. EV prices also remain high. The situation has prompted automakers to launch low-priced vehicles to boost needs.