Will the EU Auto Industry Overcome the 'Electric Vehicle Winter' with Mid-Range Models?

Concerns Over Up to 76 Trillion Won in Fines Due to Carbon Emission Regulations

European car manufacturers plan to launch dozens of mid-range and affordable electric vehicle models next year to prepare for the 'electric vehicle winter' triggered by the European Union (EU)'s carbon emission regulations and competition with China, major foreign media reported on the 13th (local time).

Recently, major car manufacturers such as Volkswagen, Stellantis, BMW, and Mercedes-Benz have lowered their profit forecasts due to intensified market competition, weakening demand in Europe, and increasing inventory in the United States. In this situation, the new EU carbon emission regulations coming into effect next year are expected to increase pressure on the automotive industry.

[Image source=Reuters Yonhap News]

The EU will regulate the carbon emissions of new cars sold from next year to 93.6g per kilometer driven. This is a significant tightening from this year's 116g/km.

An executive from an automobile company recently stated that achieving carbon emission targets has become more difficult as the growth of electric vehicles slows. This is due to consumers becoming more cost-sensitive and the reduction of subsidies in major markets like Germany.

According to consulting firm AlixPartners, car manufacturers may have to pay fines of up to 51 billion euros (approximately 75.52 trillion KRW) by 2030 due to carbon emission regulations. Carlos Tavares, CEO of Stellantis, said on the 11th, "Because consumers do not want to pay more, we have to invest 40% more," indicating that the transition to electric vehicles under EU regulations imposes a significant burden on manufacturers.

Henning Cosman, an analyst at Barclays, estimated that global car manufacturers will launch more than 100 electric vehicle models in Europe this year and about 70 next year. However, he warned that an 'electric vehicle winter' could occur as the market demands lower prices. He said, "If you are a consumer, buying an electric vehicle today would be a mistake," adding, "because you know that soon you can buy better cars with longer driving ranges and new technologies at lower prices."

European manufacturers focused on high-end models this year under the expectation that pressure to sell affordable models will increase in 2025. As a result, they have become disadvantaged and lost market share to Chinese manufacturers like BYD, which leads with affordable electric vehicles priced around 20,000 euros (approximately 29.62 million KRW).

According to Renault, to comply with carbon emission targets, EU car manufacturers need to increase their market share in Europe to 20-22%. Currently, it remains below 15%.

Accordingly, at the Paris Motor Show starting on the 14th, major manufacturers will target the market with mid-range and affordable models. Stellantis will exhibit vehicles priced below 20,000 euros made in partnership with its Chinese partner Leapmotor. Renault has already started taking orders for the R5 electric vehicle priced at 25,000 euros (approximately 37.02 million KRW).

This content was produced with the assistance of AI translation services.