Volkswagen cut its annual outlook for the second time in less than three months, citing a weaker-than-expected performance at its passenger car division as pressure on Europe’s top automaker continues to rise. According to a CNBC report, Chinese producers have gained an upper hand in EV technology and are overtaking European brands in China, the world’s biggest EV market.
They’ve also been making inroads in Europe where, until relatively recently, they had little presence. China also holds a striking pricing advantage, where the cost of batteries has dropped to $126 per kilowatt hour on a volume-weighted average basis. At the same time, packs are priced 11% higher in the US and 20% higher in Europe, according to BloombergNEF. Chinese manufacturers are also unveiling a new generation of batteries that rely on sodium, which is more abundant than the lithium currently used in EV batteries, and less prone to catching fire. In an effort to compete, carmakers have reconfigured factories to make a wider selection of more affordable models to entice wavering buyers.
Bloomberg reports that seven new electric models costing less than €25,000 ($27,810) could hit the European market this year and next, including a new Renault 5 and Stellantis NV’s Citroën e-C3, according to the Transport & Environment lobby group. In that optimistic scenario, EVs could grab as much as 24% of the European market next year, according to T&E, up from 12.5% over the first seven months of 2024, as measured by the European Automobile Manufacturers’ Association.
