One after another, launching affordable electric vehicle models, European car companies kick off a "counterattack"

European automotive giants face multiple challenges such as low charging infrastructure coverage and significant emission reduction pressure, and have launched a series of affordable electric vehicle models to counter the challenges from Chinese car manufacturers.

At this week's Paris Motor Show, several major European automakers have unveiled low-cost electric vehicles (EVs), hoping that this biennial industry event can be a turning point for the European automotive industry. Julia Poliscanova, Senior Director of Electric Vehicles and Supply Chain at Transport & Environment, told CNBC:

"There are many new models at the show, and what's particularly exciting is that many of the new cars are more affordable. Citroën, Peugeot, and Renault have showcased some smaller and more affordable models, which is exactly what our mass market needs."

European automotive giants are facing multiple challenges on the path to full electrification, including a lack of economical models and lower-than-expected deployment rates of charging infrastructure. Next year, as Europe's emission reduction targets come into effect, the pressure on European automakers will further increase—if they fail to meet the emission standards, they may face hefty fines.

Against this backdrop, automakers have realized the necessity of increasing electric vehicle sales and have used the Paris Motor Show as a platform to launch low-cost models.

Pere Brugal, President and Managing Director of General Motors Europe, stated that the challenges facing the European automotive industry should be seen as a transitional phase rather than evidence of a crisis. Brugal also believes that some of the challenges the industry faces are not always due to physical or technological barriers but require a change in existing behaviors.

"The adoption of new technologies and behaviors has never been a linear growth story, but the ultimate goal is full electric vehicles. Increased investment in public charging infrastructure will help, but in reality, Europe already has a very good charging network that can support electric vehicle travel."

A Variety of Affordable Electric Vehicle Models

At this auto show, French automaker Renault unveiled the Twingo E-Tech electric prototype to the public for the first time. Renault stated that the launch price of this all-electric vehicle will be below 20,000 euros (approximately $21,800) and is expected to be launched in 2026. Renault also introduced the compact electric SUV R4 model and started accepting orders for the R5 model.

Dacia, a brand under the Renault Group, showcased the Spring model, calling it one of the most affordable electric cars on the market, with a price also below 20,000 euros. Denis Le Vot, CEO of Dacia, told CNBC at the auto show:

"We are fully updating the Spring model, the 2024 version will feature a new design, a new engine with 64 horsepower, a new steering system, a new electronic architecture—priced below 20,000 euros, there are not many electric cars on the European market priced below this."

Additionally, automotive giant Stellantis introduced the new compact Citroën C4 and C4 X, calling these models "perfect examples" to address the challenges of energy transition

"Affordable Mobility"

Poliscanova stated that electric vehicle sales accounted for 14% of the market share this year, and the introduction of multiple low-priced electric vehicles could increase this number to as high as 24% next year.

"There is a misconception that people have lost interest in electric vehicles and there is no consumer demand, but this is not true. This year, there were no affordable car models in Europe, so people were not willing to buy those overpriced luxury cars. However, once vehicles with suitable prices are launched next year, people will flock to buy them."

Denis mentioned that the budget-friendly Dacia Spring model has sold over 15,000 units in Europe:

"People are looking for affordable ways of transportation, and in the electric vehicle sector, Dacia plays the role of affordable mobility."