Several large European automakers unveiled a bevy of affordable electric cars during the recent Paris Motor Show to counter the flood of cheap electric cars coming out of China. With electric vehicle demand waning in recent months partly due to high purchase costs, some of Europe’s most dominant carmakers are looking to boost demand and recapture the market they lost to Chinese brands.
The East Asian nation solved the electric vehicle affordability problem through a mix of industrial policies and tens of billions of dollars in subsidies that allowed Chinese carmakers to lower their EV manufacturing costs and pass on the savings to their consumers. Europe, on the other hand, still has to contend with high electric vehicle development costs and the result is exorbitantly-priced EVs that most of the market simply can’t afford.
Unfortunately, with Chinese automakers already saturating the affordable EV market, competition in this segment is incredibly fierce. The European Commission even had to step in and limit cheap EV imports from China into the EU as it was becoming clear that European carmakers risked being crowded out of the market. While Chinese EVs are now subject to steep import tariffs, European carmakers are in a race to develop affordable electric cars for the mass market and meet emission reduction targets that are taking effect next year.
As such, the Paris Motor Show acted as a launch platform for a flurry of low-cost EV models. France’s Renault debuted the Twingo E-Tech electric prototype, an affordable EV that will reportedly cost $21,800 when sales begin in 2026. The French carmaker also presented its compact electric SUV, the R5, and revealed that it has started taking orders for the R5 model.
Stellantis launched the Citroen C4X and the compact C4 through its Citroen brand and described the two EVs as ‘perfect examples’ of the car-making giant’s response to the energy transition’s challenges.
Many stakeholders hope the industry showcase can breathe new life into the European auto sector after months of stagnation. Julia Poliscanova, the senior director for vehicles and e-mobility supply chain at Transport & Environment says it feels like Europe is finally pushing back against China’s new auto manufacturing might.
Speaking to news outlet CNBC, Poliscanova noted that there were many EV models at the auto show from European carmakers like Renault, Peugeot, and Citroen that were more affordable compared to the average electric car. Such vehicles will be critical to achieving mass electric vehicle adoption, Poliscanova said, as they typically have more demand.
As these more affordable EV models from European manufacturers reach the market, they will jostle for market share with established models from firms like Rivian Automotive Inc. (NASDAQ: RIVN).
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