Some electric vehicle players have conveyed similar concerns over the looming market slowdown as buyers await the arrival of cheaper models that are now only 2-3 years away in Europe, Reuters reports.
Economic uncertainty
The report noted that battery-electric vehicle (BEV) sales in Europe surged 47% in the first three quarters of the year. Despite this notable development, industry players remain anxious over increasing interest rates and a subdued market.
Moreover, several parties also imply that customers tend to be uncertain regarding the electric vehicles’ capability to meet their preferences and needs in terms of range, safety, and price.
“The main problem is uncertainty. Many assume that the technology will improve and would rather wait three years for the next model than buy a vehicle now that will quickly lose value.”
Thomas Niedermayer, 45-year-old family-owned Bavarian car dealership Head
Affordability issue
According to AutoTrader, average electric vehicle pricing remains higher by 33% compared to their internal combustion engine-powered counterparts.
In that sense, numerous electric automakers announced plans to launch models for the entry-level market by 2026 at the earliest. As noted by EV-a2z, Tesla is set to pursue the production of its planned €25,000/$25,000 EV at the Giga Berlin in Germany.
However, European automakers are expected to face strong competition against Chinese brands’ expanded portfolio by that time, including BYD and Nio.
“You want to do the right thing for the environment, but it feels like you’re setting yourself up for a very expensive investment that will make your life that bit more complicated. We’ll probably get a hybrid first.”
Garcia, a 29-year-old corporate media director
Valley of death
Teslarati reported that BEV sales are set to beat ICE models in the European market in 2025.
However, the industry expects to struggle from the ongoing low residual values, high supply, and low demand from 2024 to 2027. Europe refers to this combination of crises as the “valley of death.”
“We call it the valley of death, which we will be going through in 2024 to 2027: low residual values, high supply, and low demand.”
Philip Nothard, insight director at dealer services firm Cox Automotive
That said, local automakers must keep an eye on Chinese brands and American EV pioneer Tesla in the coming years, as they may face long-term consequences if they fail to catch up.
All that said, the anticipated demand slowdown in Europe is primarily due to various factors like consumer uncertainty, high prices, and cheap models’ launch delay, among others. In order to stay competitive, electric automakers must overcome the ongoing and future challenges in meeting buyer demands without compromising profitability in the rapidly growing EV market.
