Whilst US and European automakers focused on ensuring new ICE cars met the latest emission standard (don’t mention VW and dieselgate), eking the last profits from an outgoing technology, the Chinese were already making the challenging and expensive transition to electric. They ditched ICE early, a tactic that paid off, establishing them today as a global leader in zero emission transport. The early transition brought about a rapid rise of homegrown electric vehicle makers in China’s, such as BYD and Xpeng, who won over their own home market, capturing the largest passenger car market on the planet. Something that had been previously dominated by both US and European automakers for over forty years.
In retaliation, western carmakers are scrambling to form partnerships with each other, in a desperate bid to ensure what happened in China, doesn’t happen elsewhere. However, as much as western automakers lead us to believe that they are fully focused on our fossil-free future, they still insist on adopting tactics that seek to maintain our dependence on petrol and diesel. Continuing to focus production efforts on internal combustion engined vehicles maybe an effective tactic for automakers looking to prop-up a sluggish EV market but in itself, this is also hampering EV uptake here and in Europe, stifling the much-needed growth that would bring about mass-market adoption. The latest UK vehicle data (courtesy of the SMMT) supports this, highlighting that only 18% of vehicles sold in the UK this year were zero emission. Petrol car sales barely shrank across 2024, equating to 54% of all cars sold YTD. In addition, demand for new hybrids actually grew from 20% a year ago, to 22% today.
So what is causing this hiatus? In the middle of a cost of living crisis, getting the most car for the least amount of money is front and centre for the consumer, and carmakers know this. They have taken the sketchy decision to build hybrid instead of affordable EVs. Consequently, nine out of the ten best selling "affordable" cars in the UK in 2024 were petrol engined with six benefiting from manufacturer discounts to sweeten the deal for buyers.
Hybrid technology was designed to improve fuel economy and provide better performance, not to entice the consumer away from the combustion engine. Sadly, it has become a useful way for automakers to guarantee that there isn’t a hard stop on ICE production. Vehicles that by enlarge, provide better profit margins than building affordable EVs. Until the manufacturers finally cease ICE production and focus mass production on affordable EV alternatives, the transition to electric is unlikely to pick up significant pace. It's this that is hindering electric growth, rather than consumers who remain unconvinced by battery technology. Meaning reaching zero emission by 2050 will continue to be an exhaust pipe-dream rather than an achievable reality.
Having learnt a hard lesson in the China, you would think that Western automakers would have been more proactive at protecting market share here in the UK and across Europe. Only now do we see them starting to ramp-up development efforts on more affordable (Sub £25,000), smaller electric vehicles. Meanwhile, China are not taking their foot off the gas (pardon the pun). The BYD Seagull EV supermini arrives in the UK and Europe in 2025 anticipated to retail at under £14,995 here in the UK, looking to take on the Dacia Spring and Citroen e-C3.
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