The average sales price of a new electric vehicle in China has almost halved since 2011, while electric vehicle prices in the US and Europe rose by 38% and 28%, respectively, over the same period, according to a new study by JATO Dynamics.
Average retail prices for electric vehicles have peaked in Europe today. In May 2021, the study found that electric vehicles were on average 52% more expensive than ICE cars in the UK and 54% more expensive in the Netherlands. In Germany the difference is not that big, although Norway seems to be the only exception – the average price for electric vehicles in Norway is 44,500 euros (220,000 RM) compared to 53,000 euros (263,000 RM) for ICE cars.
In comparison, customers in China, the largest e-car market in the world, can buy a brand new electric car for as little as 3,700 euros (18,000 RM). This is not a typo and the saying “you get what you pay for” is certainly true.
In 2011 the average retail price for electric vehicles was 41,800 euros (207,000 RM) and this year it has fallen by 47% to 22,100 euros (109,000 RM). China’s success in making affordable electric vehicles depends on several factors, including the government’s decision to invest heavily in the domestic market as early as 2009.
In 2010, the Chinese government announced a trial program that would offer incentives of up to 60,000 yuan (39,000 RM) for private electric vehicles and 50,000 yuan (32,5,000 RM) in five cities (Shanghai, Shenzhen, Hangzhou, Hefei and Changchu). for PHEVs. . The incentives stayed in place for 10 years and were due to expire by December 2020, but the Covid-19 pandemic forced their extension – albeit at a slower pace – to boost sales.
In stark contrast, average retail electric vehicle prices in the US are rising faster than any other major global market. For example, the average electric car prices in the US are now 36,200 euros (179,000 RM) compared to 26,200 euros (130,000 RM) in 2011. While the new tax credit system has accelerated the growth of its premium electric vehicle segment, shoppers with lower incomes are not foregoing it as much , and automakers are not motivated to produce more affordable electric vehicles.
This year alone, 40% of the electric vehicles sold in China were affordable city cars, with an average retail price of 6,700 euros (33,000 RM). In Europe, consumers need at least 15,740 euros (78,000 RM) to drive a new electric vehicle home, in the US it is 24,800 euros (123,000 RM). Based on these results, it is clear that the western markets must catch up with China or could fall further behind.
Automakers produce electric vehicles to serve the high-end market
Ye Qi, a member of the Volkswagen Sustainability Advisory Council, said, “China has been extremely successful in the race for EV leadership – it is growing and developing its model range incredibly quickly, which is a positive result of a number of interacting factors.”
“If OEMs in Europe and the US cannot find ways to create more affordable EV offerings, they run the risk of losing their home market advantage to Chinese competitors. As the popularity of SUVs continues to grow in Western markets, the segment appears to be a major battleground for manufacturers looking to establish themselves as leaders in the EV market. “
“At least in the short term, government subsidies and incentives will continue to support EV sales, but how long remains a crucial question for the industry,” he continued. To you – if EVs and ICE models were similarly expensive in Malaysia, which ones would you get?