Author(s) :

Tommaso Pardi; Marc Alochet; Bernard Jullien; Samuel Klebaner

Why do we need a small, affordable, sustainable electric vehicle (ASEV)?

Europe is not on track to meet the Fit for 55 targets for new car sales because of the lack of affordable offer to support rapid ZEV adoption;
Europe is still very far from achieving carbon neutrality for the European car fleet in 2050, because actual ZEVs are not sustainable in production;
Electro-mobility and the 2035 ban on non-ZEVs are increasingly unpopular and contested;
Without more production volumes, the European automotive industry is facing significant short-term factory closures and massive restructuring, as Chinese FDI increase overcapacity;
Increasing Chinese price competition on EVs represents a major threat for the European automotive industry;
In 2025, European automakers need to sell at least one ZEV for every four ICEVs to meet their CAFE threshold and avoid penalties. This ratio should increase to one ZEV for every ICEV in 2030. ASEVs, because of their low price, could contribute significantly to meeting these targets while keeping the European automotive industry competitive and profitable.

Why do we not have an ASEV in Europe?

We identify three main causes that need to be addressed if we want to bring back affordable and sustainable vehicles:

Increasing uncoordinated regulatory pressure that makes the production of smaller and lighter vehicles unprofitable;
The absence of policies aimed at preserving/promoting AS(E)Vs for environmental and social reasons;
The upmarket drift of new car sales and oriented towards exports and global markets, rather than the average European consumer.

What can we learn from countries where such AS(E)V exist?

JAPAN: In Japan, Kei cars – small vehicles typically weighing less than 900 kg – are playing an increasingly critical environmental and social role in Japan’s green growth strategy by providing rapid improvements in fuel economy, affordable access to clean and safe personal mobility for low-income populations particularly dependent on cars for mobility, and maintaining domestic manufacturing (in 2023, around 1,7 – 2,2 million vehicles, more than the current joint car production of France and Italy).

CHINA: The New Energy mini-Vehicles’ segment has been the fastest growing BEV segment in the Chinese market, providing extremely affordable access to electric mobility in large urban agglomerations, and generating significant production volumes for NEV Chinese manufacturers.

How can we promote a European made ASEV?

Our proposal to bring back ASVs in Europe via an ASEV is articulated on 5 complementary measures:

Create a sub-M1 category (M1 ASEV) or Create a new-M0 category (M0 ASEV)
Adjust the CO2 regulation for ASEV and more efficient decarbonisation
Introduction of a dedicated financial framework to support production take-off:
Introduction of a European Eco score for cars
Promotion of a European ASEV toolkit for Member States, regions and cities

What would be the impact of ASEV on decarbonisation, just transition and European industry competitiveness?

It will provide an immediate boost to new car sales of BEVs replacing Europe on an efficient, realistic and sustainable trajectory of decarbonisation in line with the Fit for 55 and 2050 carbon neutrality targets while helping European automakers to meet both CAFE and profitability targets
It will foster a market proliferation of ASEVs addressing the current limited or non-existing access of middle-classes and low revenue social groups to electric cars;
It will reconcile the average European citizen and consumer with the accelerated path towards electro-mobility needed to achieve our Green Deal’s targets;
It will restore automotive production at a level compatible with a just transition;
It will reactivate an “innovation playing field” (the “small car”) where the European automotive industry has been historically extremely competitive;
It will favour the emergence of smart local mobility systems taking full advantage of their intrinsic performances.