Electricity is 50% cheaper in China while its price soars in Europe

Since 2011

On average, they are 32% more expensive than their thermal equivalent, according to the consulting firm Jato, which warns that the main victims may be the Western manufacturers themselves, being at a disadvantage over the Chinese

The industry is looking hard at the reasons for the success of electric vehicles in China, and now a report by consultancy Jato Dynamics points directly to their price. According to his estimates, in the Asian country, the main world market for this type of vehicle, the average acquisition cost
has fallen 47% since 2011. In the same period it has increased by 38% in the United States and 28% in Europe.

In his report «
Electric: a challenge in prices“, Jato highlights China’s success in putting efficient electric cars on the market, through heavy investments by its government since 2009.” Currently, Chinese consumers can buy a new electric car from 3,700 euros, ” stands out in a statement.

In contrast, the price in the United States continues to grow faster than in any other market, and already stands at 36,200 euros, compared to 26,200 in 2011. In Germany, the average cost of acquiring an electric is 39,755, compared to at 36,979 after acquiring a thermal vehicle.

According to the consultancy, Norway is the only country on the continent where it is cheaper to buy an electric car, given that its average price there stands at 44,500 euros, compared to 53,000 for thermal cars. But, for example, in the United Kingdom buying an electric car is 52% more expensive than a thermal car (32,760 euros compared to 17,200), and 54% more in the Netherlands. On average, buy an electric in Europe
it is 32% more expensive to opt for its diesel or gasoline equivalent.

“In this scenario, China is already in the process of withdrawing government incentives for electric vehicles, while in Europe and the United States manufacturers continue to rely on them to boost their sales,” they say from Jato.

The difference in the evolution between China and the West has a lot to do with
SUV fashion boom, some more expensive silhouettes. Also that manufacturers have decided to prioritize the launch of premium electric models to make profitable the large investment of developing a technology from scratch.

The rise of Tesla has also had an impact, whose impact Jato explains as follows: “In 2013 the average price of an electric in France was 23,900 euros, although it has increased to 38,700 this year. It can be explained by the sales of the Renault Zoe: the more it sold, the more the average price fell. However, Renault did not launch another electric (removing the Kangoo vans and the Fluence sedan) which left the French consumer without alternatives when Tesla landed, whose electric models are more expensive.

A similar phenomenon has occurred in the United States, where incentives to purchase electricity (known as “tax credits”)
have especially boosted the premium market, opening up the possibility for lower-income buyers to acquire them. “Manufacturers still have the challenge of developing a truly affordable electric,” they say from Jato. “Otherwise, they will be left behind the Chinese competitors.”

“Unless manufacturers in Europe and the US find ways to create more affordable EV offerings, they risk losing their domestic market advantage over Chinese competitors,” he warns.
Ye Qi, member of the Volkswagen sustainability council. “Key industry players must begin to address the price gap between electric vehicles and combustion cars if they are to remain competitive with their peers in China,” he says.
David krajicek, CEO of Jato.


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