Competition is a bitch. Global competition in 2023, particularly. There has always been plenty of it in the car business, but now that Chinese-built EVs especially are beginning to put the squeeze on European car makers as they try to fully establish themselves in the brave new zero-emissions market, we can start to appreciate just how much of a bitch it is likely to be for some time to come.
I remember well the theory espoused about making profit from electric cars 15 years ago. It would be impossible to start with: too much R&D investment up front, too much cost in the cars, and not enough sales volume. But as the volume grew and the battery tech developed, so the margin, it was promised, should materialise.
Well, approaching 13 years since the launch of the Nissan Leaf and more than a decade after Tesla launched the first Model S, many manufacturers would tell you they are still waiting. If the margin is coming, it’s not distributing itself very evenly. Some luxury brands are probably seeing movement; some bigger-volume players too, perhaps, depending on their buying power and where they are building. But if you can manufacture in China, your chances seem to be vastly higher. In fact, if you want to be able to present a volume-selling electric car at a really competitive price, for the next decade at the very least, a Chinese manufacturing base may be the only way you can do it. Because you can stake your bonus that China’s own brands aren’t going to stop exporting to Europe - and, while so many European industry leaders argue for protectionism, the impact they are beginning to have by doing so is not small.
Of course, rather than driving down costs, the other way to ensure a margin would be to drive up the value in your new EV. We have seen firms doing that already with bigger batteries and longer range than the next, with appealing designs and novel premium brands, and by packing in the digital cabin tech.
Well, I don’t much care how big my infotainment screen is, or how many colours the ambient lighting can make. But I would like makers of EVs to think about the driver a bit more. Don’t believe the dogma: EVs can be made involving to drive, if they are given a proper chance.
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