VMs could benefit from waning EV interest
New data suggests that vehicle manufacturers scaling back on the production of electric vehicles due to cooling consumer demand could see their margins increase.
This is according to Bloomberg Intelligence‘s (BI) European Automotive Midyear Outlook.
It said that BEVs are priced 30% higher than internal combustion engine vehicles (ICE) on average, yet margins are much lower as manufacturers strive to encourage more buyers to switch to EVs.
Demand
Michael Dean, BI senior industry analyst – Autos, said: “We expect automakers to remain cautious after weak quarter one results and against a backdrop of tariff uncertainty as Chinese EV brands attempt to gain a foothold in Europe, although luxury demand will remain resilient thanks to strong order books.
“The BEV pull-back will give legacy EU automakers a prolonged period of positive free cash from internal combustion engines vehicles, part of which is now being returned to shareholders but also reinvested in new technologies providing a boost versus pure BEV makers.”
He added: “Our consumer new-car buying poll in February highlighted European buyers’ concern over the high price of BEVs. Their main issue is a lack of charging infrastructure followed by range anxiety – issues which are unlikely to be addressed in the medium term and may see more policymakers delay the phasing out of ICE. Charging infrastructure is the biggest challenge, for which there is no quick fix to service a BEV fleet that’s growing by about 130,000 units per month in Europe.”