The Race for Innovation in the Automotive Industry: The Uncertainty of Electric Car Democratization

2023-05-14 05:24:39

Since the European decision to ban thermal cars from 2035, there has been a race for innovation in the automotive industry. And if the electric car reshuffles the cards, its democratization still remains uncertain.

“With the shortage of semiconductors, there were more customers than cars available,” explains Flavien Neuvy, director of the Cetelem observatory, in Tout un monde. Manufacturers therefore did not need to make price discounts. But the economic slowdown in the United States and Europe is now having an impact on order intake.

Car manufacturers must therefore find new customers. “When we are looking for new customers, we have not yet found better than to make promotions and Tesla has launched this price battle”, summarizes Flavien Neuvy.

However, according to the automotive market specialist, if Tesla, one of the leaders in electric cars, puts pressure on European manufacturers, they are not currently following this trend to preserve their margins. But if the number of orders does not increase, the manufacturers could however align themselves with the strategy of Tesla, estimates Flavien Neuvy. “We can’t be without customers for long.”

The electric car not yet democratized

There are still relatively inexpensive small electric cars today, but they have not yet been fully democratized. “Today, the selling price of electric cars is still an obstacle for many motorists, who do not have the means to access this electric mobility”, explains Flavien Neuvy.

The selling price of electric cars is still an obstacle for many motorists

Flavien Neuvy, director of the Cetelem observatory

An electric car remains on average more expensive, especially with regard to batteries. “When you compare two identical cars – one that runs on an electric battery and another with a combustion engine – the additional cost of the electric car is still 30 to 40%.”

As for charging stations, they are deployed almost everywhere in Europe, but the question of infrastructure can represent a brake for motorists, who may wonder if they will be able to recharge their car easily when they leave for a weekend or on holiday.

>> Read again: The EU will deploy charging stations along its main roads

Finally, tensions linked to the price of electricity may have had a dissuasive effect on people considering buying an electric car. “The fact that we have mentioned in some countries problems of electricity shortages has caused great concern”, confirms Flavien Neuvy.

CO2 emissions reduction target

The European Union plans to ban the sale of thermal vehicles from 2035 with the aim of decarbonizing automobile transport. “This ban is part of the objective of achieving carbon neutrality by 2050”, explains Flavien Neuvy. “To achieve this, transport must drastically reduce its CO2 emissions and, for the moment, the electric car seems to be the best solution.”

But this also has its limits: “The carbon footprint of the electric car depends on how the electricity is produced”, explains the director of the Cetelem observatory. It should also be remembered that technical progress evolves very quickly. “We cannot say with certainty which technology will be the most efficient in 10 to 15 years from an environmental and economic point of view.”

Asked about synthetic fuels and a possible cohabitation in the future between different modes of propulsion, Flavien Neuvy warns against the volatility of public policies. “Builders are very skeptical, because they know the rules can change overnight.”

We cannot say with certainty which technology will be the most efficient in 10 to 15 years from an environmental and economic point of view.

Flavien Neuvy, director of the Cetelem observatory

“The automotive industry invests tens of billions of dollars in research and development each year and therefore we can very well imagine that there will be new technological breakthroughs appearing in 10 to 15 years,” he continues.

China ahead

One thing is certain, however, according to Flavien Neuvy: the electric car has its place in large cities, because it remains unbeatable in ensuring air quality. “It’s a real public health issue and we can clearly see that there are many European capitals that have put traffic restrictions in place. Very often, only electric cars are authorized in large city centers.”

However, we must not forget that not everyone in the world has chosen to go electric. “China does it because it is very advanced on the subject. In the United States, it is quite variable depending on the State. And in the rest of the world – in Africa or South America – we will still be driving with thermal cars for a very long time”, he specifies.

Flavien Neuvy believes that we should expect to see more and more Chinese cars on our roads over the next ten years. “These are very efficient manufacturers, especially in electric mobility,” he explains. “Today, their home market no longer offers them the same growth prospects. So, to continue to grow, they need to get out of China.”

Europe having made the choice of 100% electric, it represents the ideal target. “Entry to the United States is much more complicated for the Chinese, so for them, the priority is Europe.”

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