European and American car companies "don't play", who is hurt by the delay of electric car plans?


Hao Weili


Carmakers in Europe and the US are slowing their electric car plans.


Recently, Volkswagen officially announced that due to changing market dynamics, it has decided to indefinitely postpone the launch plan of its flagship electric sedan ID.7 in the North American market. The decision means that the ID.7 electric sedan, originally scheduled to launch in North America this year, will not be available to consumers for the time being.


■ Electric cars get a "hold button"


The ID.7 sedan, which has been on sale in Europe and China since last year, was initially expected to enter the U.S. market in 2024 as an electric replacement for the Passat, which has been discontinued in North America. But now Volkswagen said in a statement that it is committed to making choices based on market needs, while listening to customers.


Similarly, Ford Motor Co. has also pulled back, delaying the launch of new electric vehicles and lowering prices, saying that electric vehicles are "a major drag on the entire company right now." Ford expects to lose as much as $5.5 billion from its electric vehicle business in 2024.


Earlier, Mercedes-Benz CEO Kang Linsong also said at the annual shareholders' meeting that Mercedes-Benz will postpone the electrification target for five years, suspend the development of MB.EA pure electric platforms for large models such as the S-Class and E-class, and promise to continue to update internal combustion engine vehicle products in the next decade.


According to several media reports, Nissan Motor on May 17 to the United States suppliers memorandum shows that it will adjust the development schedule of electric vehicles, and ask suppliers to suspend all research and development of electric vehicles, the specific recovery time to be determined, will suspend the production of the first generation of electric vehicles in the United States, its $500 million manufacturing plant in Mississippi, the United States has also been fully shelved.


In addition, the United Kingdom announced that the implementation of the ban on fuel vehicles will be delayed from 2030 to 2035. The US government plans to relax emissions limits proposed by the Environmental Protection Agency last April. At the same time, Germany, France, the Netherlands and other countries have also changed the electric vehicle subsidy program.


Affected by the attitude of car companies, suppliers have also adjusted their course. Panasonic CEO yuki Kusumi said the company may delay plans to expand electric vehicle battery capacity in North America, "we have to adjust the pace of investment based on the actual adoption of the electric vehicle market."


■ Lack of demand, international giants can not love


Why Europe and the US are slowing down their electric car strategy?


Zhang Zuqiu, president of Paolong Technology, believes that the European and American car companies have postponed the electric vehicle plan based on the commercial logic of the market itself, and the application scenario of electric vehicles in Europe and the United States has indeed encountered many challenges. For example, although luxury cars in Europe are world-famous, the general public in countries such as France, Italy, Spain and other countries are more inclined to use vehicles as transportation tools, A-class car consumption accounts for A relatively large proportion, and some high-end electric vehicles are misaligned with their mainstream consumption levels.


At the same time, the price difference between oil and electricity in Europe is not as obvious as in China, and the fuel cost in the United States is lower, which makes the construction of charging pile infrastructure lack of momentum and slow progress; In addition, the United States has a vast territory and a long driving distance, while many German highways do not limit the speed, and driving at 160 km/h is common, which is a great challenge for the endurance of electric vehicles. "Before, government subsidies attracted the public to buy electric cars, but now the subsidies have been reduced, and consumers' incentive to buy has suddenly weakened," Zhang said.


Weak market demand and unprofitable business segments have made auto giants unable to love electric vehicles. But in fact, European and American car companies have not completely abandoned electric vehicles. Volkswagen still plans to launch its ID.Buzz model in the United States in the fourth quarter of 2024, and reiterated its ambitious plan to introduce 25 electric vehicles in North America by 2030. Mercedes-benz officials also stressed that they will not stop developing new pure electric vehicle architecture platforms, and insist that the determination of electric transformation remains unchanged.


Zhang Quanhui, CEO of Suzhou Haizhibo Electronic Technology Co., LTD., pointed out that the current is a period of great change in the automotive industry that has not been seen in a century, and the decision-making of car companies is easy to swing, and the concept of consumers is easy to shake, which is not rare. In the initial development of electric vehicles, China also had a wait-and-see period, and only at a certain point ushered in the outbreak of the market.


■ Car companies, suppliers, industrial chains are injured


Who has been hurt by the delay of the electric car program by pressing the "delay button" in hesitation?


Zhang Quanhui analysis, the biggest change brought by electric vehicles is the supply chain. China's auto industry actively seeks change in the industrial transformation, and it has taken more than ten years to cultivate an electric vehicle industry chain, while European and American auto companies have been in a passive transformation state. In the industrial chain change, once dominated by European and American car companies began to slowly be dominated by Chinese suppliers, Volkswagen, Mercedes-Benz, Tesla, etc., have sought a deep binding with Chinese battery manufacturers, "in fact, European and American car companies have gradually been stuck in the neck."


The rapid development of electric vehicles will undoubtedly benefit Chinese suppliers greatly, and it is better to "pull the plug" than to work hard with China. Zhang Quanhui believes that European and American countries to reduce subsidies, raise tariffs, and postpone the promotion are to gain time for the cultivation of the local electric vehicle industry chain. However, the progress of automotive technology requires model iteration, and the investment of model iteration is supported by sales volume, so the slowdown of electric vehicle plans will inevitably affect the speed of automotive technological change.


Zhang Zuqiu believes that the first impact on Chinese car companies, and then spread to the supplier chain. Because the demand difference between domestic and foreign markets has become larger, and the technical route is diversified, which brings greater challenges to the R&D capacity layout of car companies and suppliers, and can not put eggs in one basket means more energy and capital investment.


Yang Guanghui, a veteran of the power battery industry in the European market, pointed out that emerging forces will bear the brunt, and upstream and downstream enterprises with battery suppliers as the core will be directly affected. From this year's power battery raw material prices less than 1/3 of the peak can be seen. On the contrary, traditional auto parts suppliers have been given a certain breathing space and time, and market demand is expected to slowly pick up.


■ Hard practice, clear goals, flexible response


The mainstream car market in Europe and the United States has become increasingly "cold" for electric vehicles, which seems to have poured cold water on the emerging Chinese electric vehicles. But according to Zhang, this is a double-edged sword.


He pointed out that when the quality of electric vehicles in China has not yet reached perfection, the more mass production is likely to amplify the problem. Just like 20 years ago, Chinese motorcycles went to sea and almost monopolized the Southeast Asian market, but it was gradually swallowed by Japanese companies because of its insufficient quality. Therefore, Chinese car companies and suppliers must use this opportunity to practice internal skills, and get rid of the dependence on European and American auto standards, to form their own standards, in order to obtain lasting development momentum.


In fact, the so-called "giving up" of European and American car companies is not really giving up, but strategic adjustment and flexible response to market changes, which requires Chinese car companies and suppliers to increase flexibility. Yang Guanghui believes that car companies should adjust the vehicle platform to a flexible model of oil and electricity, foreign markets for the acceptance of new things is far less than China, auto suppliers to do purposeful sea.


Zhang Zuqiu suggested that car companies and parts companies to clear their target market, if the focus on the domestic market, to follow up the domestic wave of electrification; If you want to expand overseas, you need to prepare products that meet different needs.


Zhang Zuqiu pointed out that there are also similarities in different technical routes in domestic and foreign markets. In fact, the growth rate of domestic pure electric vehicles has also slowed down, and the growth rate of plug-in models is significantly higher than that of electric models. China Auto Association data show that in the first four months of this year, China's plug-in model growth rate as high as 84.5%. While slowing its electric vehicle plans, the Volkswagen Group has also shifted to producing and selling more plug-in hybrid models. "Car companies and suppliers should be keen to catch market changes, balance investment and production capacity."


Originally published by China Automotive News, May 30, 2024