Luxury brands and volume players are seeing profits, but Chinese manufacturers have an advantage
Better packaging, more control and greater engagement could be key to extracting value from EVs
Competition is a bitch. Global competition in 2023, particularly. There has always been plenty of it in the car business, but now that Chinese-built EVs especially are beginning to put the squeeze on European car makers as they try to fully establish themselves in the brave new zero-emissions market, we can start to appreciate just how much of a bitch it is likely to be for some time to come.
I remember well the theory espoused about making profit from electric cars 15 years ago. It would be impossible to start with: too much R&D investment up front, too much cost in the cars, and not enough sales volume. But as the volume grew and the battery tech developed, so the margin, it was promised, should materialise.
Well, approaching 13 years since the launch of the Nissan Leaf and more than a decade after Tesla launched the first Model S, many manufacturers would tell you they are still waiting. If the margin is coming, it’s not distributing itself very evenly. Some luxury brands are probably seeing movement; some bigger-volume players too, perhaps, depending on their buying power and where they are building. But if you can manufacture in China, your chances seem to be vastly higher. In fact, if you want to be able to present a volume-selling electric car at a really competitive price, for the next decade at the very least, a Chinese manufacturing base may be the only way you can do it. Because you can stake your bonus that China’s own brands aren’t going to stop exporting to Europe – and, while so many European industry leaders argue for protectionism, the impact they are beginning to have by doing so is not small.
Of course, rather than driving down costs, the other way to ensure a margin would be to drive up the value in your new EV. We have seen firms doing that already with bigger batteries and longer range than the next, with appealing designs and novel premium brands, and by packing in the digital cabin tech.
Well, I don’t much care how big my infotainment screen is, or how many colours the ambient lighting can make. But I would like makers of EVs to think about the driver a bit more. Don’t believe the dogma: EVs can be made involving to drive, if they are given a proper chance.
Drive battery packs need to be fitted around the occupants for a start, not just plonked underneath them to simply displace the cabin upwards by six inches. Brands like Porsche and Polestar already do this, but others need to follow – and when they do, we will see better-packaged EVs with the lower body profiles and centres of gravity they need to handle well.
Second, if you can give the driver more control over the car, do it. Lots of new EVs are coming to market with little or no options to alter battery regeneration as you drive, for instance. That’s an easy way to engage, but also to deliver better real-world range.
Also, while some do have simplified automatic gearboxes, none has made them manually controllable yet. So what about an EV in which you can change gear?
And finally, what about torque vectoring? This was supposed to be the dynamic trump card of EVs, but we are still not seeing more affordable EVs that fully deliver it. If I want to trade some outright power, and put my twin-motor EV into a rear-drive mode, I should be able to. It should be easy to make happen.
The weight of EVs, and their ability to cover greater distances between charges, are factors that should improve incrementally over time. But even if they do, the driving experiences of these cars won’t get any richer unless manufacturers put the effort in by innovating – especially when it comes to the driving experience. If they do that, they can offer something the next company can’t – and that will be worth money to them.