Pricing Predicament: Why Electric Vehicles Face Resistance in Europe.

The European automotive manufacturing industry is currently facing a significant challenge as many Europeans cannot afford the prices of electric vehicles. Their advanced technology and competitive pricing, have raised concerns among their European counterparts, causing a profound impact on the European automotive market.

Due to the relatively high prices of electric vehicles in the European automotive market, affordability has become an issue for many Europeans. While high-income populations in some countries show a higher penetration rate of electric vehicles, countries in Central Europe, Eastern Europe, Southern Europe, and similar regions with lower per capita net income experience significantly lower penetration rates. This situation is partially attributed to the high prices of electric vehicles, especially when compared to traditional fuel-powered vehicles.

The costs of manufacturing electric vehicles in Europe are relatively high, primarily due to structural changes in the supply chain and increased labor costs. Compared to China, Europe lacks a well-developed battery supply chain, leading to an increase in the prices of power batteries. Additionally, higher labor costs in Europe further contribute to an overall increase in manufacturing costs.

The pricing issue of electric vehicles poses a barrier to their widespread adoption in the market. Despite legislative efforts by the EU to reduce vehicle carbon dioxide emissions, initiatives to accelerate the popularization of electric vehicles are insufficient at both the EU and national levels. According to the latest data, pricing remains a significant obstacle for European consumers in purchasing electric vehicles.

Electric vehicles account for less than 9% of the market share in EU member states, and this figure is even lower in more than half of the member states. This is particularly concentrated in Central, Eastern, and Southern Europe, where the average per capita net income is €13,000. In contrast, in five Northern and Western European countries with a per capita net income exceeding €32,000, the market share of electric vehicles exceeds 30%.

Slovakia is listed as one of the EU countries with the lowest proportion of electric vehicles, with experts pointing out that Slovaks find it challenging to afford the prices of electric vehicles, becoming a major obstacle to purchasing such vehicles. This phenomenon is directly related to national income, indicating that affordability is a significant issue for EU consumers.

The European Automotive Manufacturers Association indicates a direct correlation between the market share of electric vehicles and a country’s gross national income (per capita GDP). Slovakia is listed as one of the countries with the lowest market share, which is related to the average net income of residents.

In 2022, electric vehicles in Slovakia accounted for only 3.7% of newly registered vehicles, with the country’s average annual net income at €10,985. This is lower than other EU regions, demonstrating that Slovaks find it challenging to afford the prices of electric vehicles.

Trends in Central Europe, Eastern Europe, and Southern Europe: Some countries in Central Europe, Eastern Europe, and Southern Europe, such as Greece, Italy, Poland, and Croatia, also have relatively lower market shares, primarily due to an average net income of around €13,000 per worker.

European automotive manufacturers need to contemplate strategies to enhance competitiveness and reduce costs to counter Chinese electric vehicle manufacturer competition. Simultaneously, governments should increase support for the electric vehicle industry, promoting corresponding infrastructure and subsidy policies to facilitate the healthy development of the electric vehicle market.