Recently, it has been reported that Renault Group’s Dacia brand has adjusted the price of its Spring electric vehicle (EV) in the French market by 2000 euros ($2063).
The move is seen as part of a broad strategy for European carmakers to meet the challenges and promote the popularity of electric vehicles.
In the face of tightening emissions regulations in the European Union, carmakers are offering discounts to boost sales of electric vehicles.
Under EU rules automakers must ensure that at least 1/5 of their sales in the European market are electric vehicles to avoid facing huge fines.
However, electric vehicles accounted for only 13% of total sales in the first 11 months of 2024, a far cry from the target, according to the latest data from the European Association of Automobile Manufacturers.
Against this background, the Dacia brand, which is famous for its performance-to-price ratio, decided to reduce the price of the Spring model, and the new entry price has been adjusted to 16900 euros ($17458).
The move aims to enhance its competitiveness in the fierce market competition, especially in the competition with Chinese electric vehicle brands.
The joint venture between Zero and Stellantis slashed the price of its T03 model by 4000 euros ($4130) to 14900 euros ($15385), making it one of the most economical electric vehicles in the region.
Dacia’s price reduction strategy is undoubtedly a positive response to this market competition situation.
With the advent of 2025 the EU is accelerating the process of tightening its policy on carbon-emitting vehicles.
The new rules make it clear that from January 1, 2025, the average carbon dioxide emissions per kilometer of each new car must be controlled within 93.
6 grams.
A consulting firm pointed out that this standard was 19% lower than this year’s target, adding that under the new emission measurement system, the target for 2024 would be equivalent to 116 grams per kilometer.
The EU will set specific emission reduction targets for each carmaker in accordance with the rules, taking into account the average quality of its new cars.
For each newly registered vehicle the manufacturer will face a fine of 95 euros per gram if the emissions exceed a certain target.
Luca de Mayo, chief executive of Renault and president of the European Association of Automobile Manufacturers, warned that the entire auto industry could face a fine of up to 15 billion euros next year.
Jean-Philippe Imparato, chief executive of Stellantis Europe, also revealed last month that the company would face a fine of up to 3 billion euros if it failed to meet the standards.
Useful analysts estimate that Stellantis, BMW and Renault are in a relatively good position to deal with carbon emissions challenges, while Ford, Mercedes-Benz and Volkswagen face large emission reduction gaps that need to be remedied.
It is estimated that Volkswagen alone could be fined 1.
5 billion to 4.
7 billion euros in 2025 for failure to comply, depending on the actual effectiveness of its carbon dioxide emissions reduction.
So what can automakers do to avoid the potential risk of fines? One strategy is that companies with low sales of electric vehicles can work with industry leaders to reduce their overall average emissions by “concentrating” emissions or buying credits from other manufacturers.
Japan’s Suzuki, for example, has signed a joint agreement with Volvo, which is owned by Geely, while Ford announced earlier this year that it had bought a $3.
8 billion credit line for use in North American and European markets.
In addition, many companies are expected to boost sales by offering discounts on electric vehicles and raising the price of gasoline-powered vehicles to make them more attractive to consumers, thereby reducing sales of “harmful ingredients” with high carbon dioxide emissions in their product portfolios.
Volvo is outstanding in reducing overall emissions, accounting for a large proportion of its production of electric vehicles and plug-in hybrid vehicles.
Chinese companies such as Tesla and BYD could also become suppliers of emissions credits for underperforming companies.
Depending on the possible supply and demand, each additional gram of carbon dioxide emissions may cost about 20 euros.
It is worth noting that EU climate rules become stricter every five years with the ultimate goal of phasing out emitting cars and trucks by 2035 and achieving a green transformation in the transport sector.
Faced with this new challenge EU automakers have not chosen to sit idly by but actively respond to it.
In the first few months of the new phase of 2025 emissions regulations are about to take effect, they plan to launch a number of affordable electric vehicles, which are likely to be carefully designed to meet new goals.
For example Fiat launched the new Panda EV which has attracted the attention of many consumers with its hybrid and all-electric versions which sell for less than £20000 and about £22000 respectively.
Not to be outdone, Volkswagen has launched a golf-style, powerful ID.
2all model that sells for about £21000, further enriching consumers’ choices.
However, it is not enough to rely on the launch of new models to achieve the EU’s climate goals.
According to the International Clean Transport Committee (ICCT), automakers need to increase their share of electric vehicles from 16% in 2023 to about 28% of total sales by 2025.
To achieve this goal some European manufacturers have begun to adjust their pricing strategies by raising the cost of internal combustion engines on the one hand and sharply reducing the prices of existing electric vehicles on the other to make them more attractive to consumers.
However not all automakers are enthusiastic about this challenge.
Some companies have expressed concern about meeting stricter targets within a specified period of time and are lobbying the European Commission to relax regulations.
They argue that supply chain constraints, high production costs and slower-than-expected consumer acceptance of electric vehicles could make compliance difficult.
While it is not surprising to push for changes in the rules critics warn that any loosening of EU emissionsAny move to relax regulations could undermine efforts to accelerate the transition to clean cars.
The automotive industry, which accounts for a large part of Europe’s greenhouse gas emissions, is seen as key to achieving broader climate goals.
Therefore, any loosening of the rules could have a negative impact on the green transformation across Europe.
, Of course, the discussion is just discussion, the reality is that sales trends in the EU are largely determined by local conditions and whether they can promote this shift.
Take Germany, Europe’s largest automobile market, as an example.
Sales of electric vehicles will be hit hard in 2024 as the German government cut subsidies for electric vehicles in late 2023.
This fact once again proves the great impact of policies on the market.
, Despite this, in the long run, the proportion of electric vehicles in new car sales in the EU is still steadily rising.
Electric vehicles are expected to account for about 25% of new car sales in the EU by 2025, and sales of electric vehicles are expected to surpass internal combustion engine vehicles by 2030, which is consistent with the goal of tightening EU emissions rules.
This trend not only reflects the efforts and determination of European automakers, but also demonstrates the EU’s firm stance in promoting green transformation.
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