Renault’s ceo Luca de Meo on Tuesday said in an open letter that the European automotive industry is facing an “onslaught” of electric vehicles from China, and policymakers must change that.  

In the 20-page document, de Meo, who is also president of the European auto association ACEA, says European imports from China have increased fivefold since 2017. Most imports during H1 2023 were from MG, BYD and Tesla; the latter ships its Model Y manufactured in Shanghai to Europe.

“In the global battle around electric vehicles, we can see three radically different strategies: China rules; the US stimulates; and Europe regulates,” the letter states. “Chinese manufacturers are a generation ahead in terms of performance and costs of EVs (range, charging time, charging network, etc), as well as the software and speed of development of new models (between 1.5 and 2 years versus 3 to 5 years).”

While acknowledging that Europe must manage relations with China, as completely closing the door to them would be “the worst possible response,” de Meo notes that Chinese manufacturers have several advantages over European counterparts.

In the A-C car segment, China has a cost advantage of €6,000-7,000 ($6,520-7,605) over equivalent European models, which is roughly 25% of the total price, the letter says. That is mainly due to large subsidies injected by Beijing since its 2012 electric vehicle push. Citing third-party data, de Meo says Chinese subsidies reached €116 billion up until 2022.

Yet, other advantages include twice as cheap energy costs, and 40% cheaper wage costs, compared to Europe, Kallanish understands.

The ceo highlights six simultaneous challenges haunting the European automotive industry today: decarbonisation, digital revolution, regulations, technological volatility, price volatility and workforce reskilling. To counter them, he suggests seven recommendations and eight measures.

“Europe must invent a hybrid model. This means starting with a defensive approach to ensure that we get off to a good start, before seeking to conquer global markets,” he says.

De Meo warns that between eight and ten new regulations will be introduced annually by the various European Commission directorates between now and 2030. His plea, weeks before the next European elections, calls for “an end to the current system, with the continuous rollout of new standards, fixed deadlines and threat of fines for non-application.”

Among other recommendations, the executive identifies 10 “major projects” in strategic areas, such as promoting small European cars and “revolutionising” last-mile deliveries; developing charging infrastructure and vehicle-to-grid technologies; and increase Europe’s competitiveness in semiconductors.

In tandem, the letter suggests EU policymakers should accelerate the development of smart, hyper-connected autonomous vehicles; allocate a quota of low-carbon, affordable energy to the auto industry; and stop “dictating” technology choices to the industry as e-fuels should be further explored.