Automotive News Europe — 2023-11-24
Automotive Industry
Just a few years ago, things looked grim for European buyers who wanted an inexpensive car, whether it was a minicar such as the Renault Twingo or simply an entry-level small hatchback at a price of less than €20,000, let alone a battery-electric car, with even the cheapest EVs starting at more than €30,000.
Europe's minicar segment almost halved in 2022 from a recent high of 1.2 m in 2017, and key models including the Citroen C1, Skoda Citigo and Ford Ka were pulled from the market. Others including the Renault Twingo were nearing the end of their life cycles with no successors announced.
Enter the affordable Europe-built battery-electric vehicle -- equipped with lower-cost battery technology -- as a way to counter the threat of new entrants from China and address growing concerns in the region about the rising cost of living.
Among recently announced models, Stellantis and Renault Group have just said they would sell Europe-made EVs for less than €20,000.
Volkswagen Group has already detailed how it will sell the full-electric ID2 for less than €25,000 and CEO Oliver Blume said a sub-20,000 EV – perhaps called the ID1 -- could be coming in the second half of this decade.
Tesla, which has a large factory near Berlin, could accelerate development of a small EV that would cost €25,000 or less. Hyundai/Kia has also raised the idea of selling inexpensive EVs in Europe that would replace the i10 minicar and i20 small car.
One catalyst has been improvements in lithium iron phosphate (LFP) batteries, which use abundant and cheap raw materials. Some estimates put the cost per stored kilowatt (a measure of energy density) for LFP at 30% less than nickel manganese cobalt (NMC) batteries.
Renault and Stellantis will use LFP batteries in their least-expensive models; Stellantis has just signed a memorandum of understanding with China’s CATL to build a gigafactory in Europe that would make LFP batteries.
"LFP is a chemistry that will allow a very good level of affordability and will support the fact that we will keep mobility open for everybody, like the Citroen New e-C3 at €23,300 -- and more to come under €20,000," Maxime Picat, head of supply chain at Stellantis said at the CATL announcement.
The recent moves also address concerns that Europe is failing to develop both an EV supply chain and the ability to build inexpensive cars in the region, especially as inflation persists throughout the eurozone. Automakers have sharply increased their average selling prices since 2020 in response to COVID-driven supply shortages and increasing energy costs, but even they admit that as consumer confidence cools those price hikes are likely to be unsustainable.
Here’s a roundup of inexpensive EVs expected to be built and sold in Europe:
Citroen
The Stellantis brand broke the ice on the sub-25,000 euro EV made in Europe in October when it announced it would sell the New e-C3 small hatchback at a starting price of €23,300. It then raised the stakes by saying a lower-range model would come in at €19,900 in 2025. The New C3 is based on the automaker's so-called Smart Car platform developed for India and other emerging and developing economies.
Fiat
A no-frills Panda-inspired model for less than €25,000 ($27,347) -- will be unveiled in July 2024, Fiat brand CEO Olivier Francois said in an interview in August. It would also be based on the Smart Car platform, as could equivalent models for Opel/Vauxhall and Peugeot. The new Panda will be built in Serbia.
Renault Group
Renault Group CEO Luca de Meo had raised the idea that the coming Renault 5 small car (2024) could be sold for about €25,000, but he confirmed that would be the target last week when talking to investors about the company's EV spinoff, Ampere. De Meo also had a surprise: Renault would build a new generation of Twingo to debut in 2026 as an EV that would sell for less than €20,000. The Renault 5 will be built in northern France; no official word on the Twingo, but Slovenia is a strong possibility.
Tesla
Tesla-watchers have long speculated about a low-cost model that would sit below the Model 3, but with few solid announcements from the US-based EV maker. The latest word came earlier this month: Tesla will build a 25,000-euro ($26,837.50) car at its factory near Berlin, a source with knowledge of the matter told Reuters. The source, who declined to be named, did not specify when production will begin. One factor that could tip the scales is that CEO Elon Musk has said he wants to sell as many as 20 m cars annually, and lower-priced models would be the most certain way to drive volumes, including in Berlin, where an expansion to 1 m units annually is planned.
Hyundai
Hyundai is working on a battery-powered minicar, but it will take some time to develop a production-ready version, Hyundai Europe’s marketing chief, Andreas-Christoph Hofmann, said at the Automotive News Europe Congress in Prague in 2022. There could also be a version for sibling brand Kia. "Everybody in the industry knows the target of this kind of vehicle is €20,000," Hofmann said. Hyundai and Kia have low-cost manufacturing sites in Eastern Europe, and Hyundai’s factory in Turkey currently builds the i10 and i20 models.