JATO, an automotive research company, released a report outlining the “existential threat” to European, American, Japanese and Korean automakers from Chinese electric vehicles (EVs).
The average prices of EVs from the UK, US and Eurozone are €60–70,000 ($62–73,000) – almost double the equivalent Chinese EV price of around €35,000 in 2024.
And as demand for EVs and plug-in hybrids continues to gain momentum across the world, it has become easier for manufacturers to lower the cost of their batteries, the report stated.
The price gap between EVs and internal combustion engine (ICE) vehicles has decreased since 2018 – in part due to EVs getting cheaper, and the price of ICE vehicles going up, according to the report.
- In 2018, an EV was 51% more expensive than an ICE vehicle in the UK. This changed to just 18% higher in 2024
- ICE vehicles became 14% more expensive in this period as well
- the Eurozone gap was similar: 53% in 2018 and just over 20% in 2024
- the US is an exception, as prices of EVs have only come down, whilst ICE vehicles have remained around the same price
- in China, EVs and ICE cars started to cost the same in 2021, in part due to the government incentives on EVs.
The industry in China has seen better and cheaper batteries alongside the price competition between EV manufacturers:
- in 2024, the average cost of an EV compared to an ICE vehicle was 1% lower. Both EVs and ICE vehicles have fallen in price in China, by 15% and 28% respectively.
This is due to the economies of scale, battery production being domestically owned and the central government being actively involved.
EVs also remain much cheaper in China than they are, on average, in other regions. In 2024, the price gap was 111% in the Eurozone, 122% in the UK and 109% in the US.
Chinese competition only emerged relatively recently, as the report states that for decades foreign vehicle brands were preferred. This changed with the adoption of EVs, and now China’s domestic market is very saturated.
Chinese vehicle manufacturers have turned their focus to markets across south-east Asia and Latin America. These manufacturers can benefit from competitive pricing and looser trade restrictions.
Japanese brands like Toyota, Nissan, Honda and Mitsubishi have especially felt the effects of Chinese cars in these markets, the report stated. In south-east Asia excluding the Philippines, Japanese brands’ market share was 75% in 2019, while Chinese brands had 1.9%. In 2024, this changed to 61% and 7.2%.
JATO claims that this split is even more dramatic for EVs.
In Latin America, BYD sold 77,000 new cars in Brazil, with a focus on targeting the Mexican car market as well. Chinese EVs accounted for around 30% of car registrations in Chile between January and November 2024.
The report states it is only a matter of time before more Chinese EVs come into Europe.
Research body Rho Motion has forecast that over 20 million EVs will be sold in 2025. Most will be sold in China. Head of research Iola Hughes said: “China’s grip on the global market isn’t going anywhere this year with several new plants set to open around the world, expanding its foothold internationally.”