Chinese electric cars have two problems: price and fame

According to an American study, European motorists would only buy Chinese cars when faced with discounts and more brand familiarity

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By: Francesco Barontini

Published by: Brian Potter

Feb 5, 2025 at 4:46am ET

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Chinese manufacturers are growing across Europe, but not as much as they had hoped before launching their expansion strategies. On the contrary, in 2024 they recorded declining numbers for the first time.

A study explains what they need to do to consistently improve. It comes from Escalent, a Michigan-based analysis and consulting firm, which says that everything will revolve around... price.

Lower prices are needed

The paper explains that to really make a difference in terms of sales volumes, Chinese manufacturers would have to cut prices significantly. If prices were cut by 10 per cent, one in ten motorists would consider buying a Chinese-made electric car.

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The results are based on a survey of more than 1,600 motorists in France, Germany, the UK, Spain and Italy. And it is the latter two markets in particular that have shown greater sensitivity to price reductions.

But the average percentage reduction that would make respondents consider buying a Chinese car would be around 27%. An impractical rate for anyone, even in the light of the measures taken by the European Union.

Do the duties work?

The fact that the much-discussed tariffs are now in place makes Chinese electric cars much less competitive. In fact, they are sometimes even more expensive than their European competitors. This is the case in Germany, for example, between the Volkswagen ID.3 (from €33,330) and the MG4 (from €34,990).

XPOWER Electric MG4 (2023)

The MG4

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What's the alternative? Work on reputation. Again, according to the study, European consumers feel more comfortable buying a car from a well-known brand that has built up a relationship with customers over decades of presence on the market and can rely on a good after-sales service network. This is how brands from the dragon country fill the gap, by making themselves known.

This is why some manufacturers are proposing very technologically advanced models, even if they only produce small numbers: to show what they are capable of. Some are more successful than others, and the figures confirm that this is the right strategy.

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