Carmakers in race for low-cost EVs amid tepid sales growth

Global carmakers such as Volkswagen, Hyundai Motor Group and Stellantis N.V. are in a race to release cheaper electric vehicles with the entry price in the $25,000-$30,000 range, targeting budget-conscious drivers.

They hope modestly priced EVs will lower the barriers to EVs and boost their sales in the face of government subsidy cuts, high borrowing costs and the lack of charging stations.

French carmaker Citroen will launch a new all-electric e-C3 hatchback early next year. Fiat is slated to unveil an electric Panda SUV next year. Both companies are under Stellantis.

Notably, the two new models will be offered at below €25,000 ($27,500).

That is less than half the average price of 79 million won ($60,300) for top 15 EV models sold in South Korea in the first half of this year, based on data from local market tracker CarIsYou Data Lab.

To reduce manufacturing costs, France-based Citroen is said to be churning out the electric e-C3 EVs in Slovakia and share EV manufacturing platforms with Italian carmaker Fiat.

Such moves are aimed at countering China’s rise in Europe’s EV market, the world’s largest, armed with low-cost EVs.

By comparison, Renault Group is performing better than other European EV brands. It rolls out the Dacia Spring Electric in China and sells them in Europe at €20,800. The low-cost model has contributed to its sales growth.

Next year, it plans to launch a new Renault 5 EV supermini at around €20,500.

Tesla Inc., General Motors Co., Hyundai Motor Co. and Kia Corp. are following suit.

Hyundai and its sister company Kia will unveil new electric models of the Casper compact SUV and the Kia Ray camper van in the coming months.

Like Chinese EV makers, the new EVs of Hyundai and Kia will likely be installed with lithium iron phosphate (LFP) batteries, cheaper than those made from lithium, nickel, cobalt and manganese (NCM), widely used for EVs, so they may be able to price the new EVs at around 20 million won ($15,200).

Tesla said it will release a budget-friendly Model 2 with an entry price of $25,000.

Volkswagen has unveiled the concept of the electric ID.2all, which it said costs less than €25,000. GM has launched the small SUV crossover of the Chevrolet Equinox EV at $30,000.

Write to Nan-Sae Bin and Sungsu Bae at binthere@hankyung.com
Yeonhee Kim edited this article.