Europe needs to build its own EV brand

By now you’ve probably seen this map. Though China is the world’s largest automotive market by far – accounting for nearly half of global sales – it’s an increasingly saturated market that’s getting harder to break into for the major players.

Auto makers are being forced to innovate in order to defend their spots in the market, and within China, that means focusing on another growth opportunity – electric vehicles.

(Image: Tom Grundy / Shutterstock)

For the past few years, Europe has been leading the charge in electric car development, with governments in several countries and public policies incentivising the creation of green energy infrastructure. But as China dominates the electric market, Europe’s ambition to get on the map is slipping. And while Chinese firms have been taking a lead in deploying EV technology, public attention is turning to Europe, too.

China will undoubtedly dominate the EV market over the next decade. What concerns European automakers is that Chinese firms are offering something different. Chinese producers are attempting to build high-value-added vehicles, and are also looking to build manufacturing bases overseas to seize the market. That means building state-of-the-art manufacturing capacities and raising research and development (R&D) capability globally.

The manufacturer SDIC (Shenzhen), for example, is already building an EV plant in Russia. CNOOC, another Chinese giant, is pouring investment in plants around the world to prepare to launch electric vehicles worldwide.

“There’s no time to waste,” says Colin Radice, head of electric vehicles for the Automotive Industry Association of Europe. “To win in China, you have to be active there today.”

(Image: Dobb/Flickr)

While much of Europe remains relatively saturated in terms of the size of its car market, the relative size of China’s relatively small vehicle market puts it on a far more sustainable path than European markets. In Europe, the penetration of electric and hybrid cars is still very low, at around 3 per cent of vehicles sold, whereas it’s 20 per cent in China.

(Image: Kobee/Flickr)

But Europe’s role in the EV industry is changing. For while China’s electric vehicle market is focusing on production of high-value-added vehicles, in Europe, the focus is on standardised EVs built using the latest technology. If China is going to take top position on the global EV market, Europe has to stay in the driving seat.

“Europe is obviously much further ahead than they are in terms of infrastructure,” says Eric Shaw, a research fellow at Oxford University’s Future of Electric Vehicles Programme, in an interview with CNN.

What is clear is that the European industry is losing ground – and lost ground that the continent could easily regain. With more than 35 per cent of all new car sales in Europe forecast to be electric by 2020, and over 25 per cent by 2025, there’s certainly a way for the European auto industry to win back the leadership of the EV market in 2020 and beyond.

But to do so, the European industry needs to make a number of smart moves. It has to invest in both R&D and manufacturing infrastructure, and develop a global strategy for dealing with the challenges of Chinese competition.

But the most challenging element of staying on top in the electric vehicle industry is changing the mindset of consumers. Over the years, Europe has pushed their population towards greater car ownership, and slowly, they are taking notice.

In Beijing, China, for example, electric vehicle ownership is on the rise as other car models drop in price and pollution becomes a concern for the public. In such a market, it’s not surprising that the European manufacturers are seeing pressure to offer affordable electric vehicles that will appeal to Chinese consumers. But because China is so far ahead, European manufacturers need to go far beyond their traditional market share in order to break through to Chinese customers, even in markets where green infrastructure is ready, and that’s where the car makers need to look to Europe for help.

Already, some experts say that Europe’s car makers have the potential to build a global digitalised platform for their autonomous and electric vehicles. With that in mind, it’s up to Europe to reverse its plan and demonstrate leadership in the EV market.

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