EU Planning New Affordable EV Class to Counter China

• The European Union wants to define a new class of more affordable urban vehicles.
• The new “E car” category sounds similar to Japan’s kei cars, and it should be defined in the next couple of years.
• The EU’s goal is to bring down the cost of city cars to help local manufacturers stave off the advance of Chinese carmakers on the continent.

New cars, even small ones, have become very expensive, and one reason for that is the mandatory safety equipment that has to be legally sold in the European Union. But the EU wants to change that for city cars, creating a new class of vehicles that will have less safety gear on them, specifically to bring down their acquisition price.

This news comes after President Trump revealed that he was interested in making Japanese kei cars legal in the United States. This new EU proposal will be similar to kei car regulations and mandate strict size or power restrictions to determine which vehicles qualify for the new “E car” category and which don’t. They will likely limit the size and power of vehicles, just like in Japan.

Making these vehicles even more attractive will be a system of tax exemptions, which should further incentivize people to choose them. So while they will be less safe than a regular vehicle that has to meet all the safety criteria, they will be considerably safer than quadricycles such as the Citroen Ami and others coming in from China, which don’t have to go through the battery of safety (and crash) tests that a normal car has to undergo.

These new E cars will be crash tested and offer similar structural rigidity to larger vehicles, but they will have fewer active safety aids. The goal is to make small city cars 10-20% cheaper than they are today, and this will be achieved by removing systems such as autonomous emergency braking, drowsiness and driver attention detection systems or the lane keeping assist functionality.

It will be interesting to see what the size and power requirements are and whether they include vehicles that are already on sale or ones that will debut soon. Cars like the very popular Renault 5 E-Tech and the smaller Twingo could qualify, although chances are they may be too big, and something like the Dacia Hipster is closer to the formula.

Besides, removing some electronics from a new vehicle like a Renault 5 likely won’t be enough to bring the price down by the desired 20%. But it all depends on what the size and power requirements will be and whether existing cars can be modified to meet them, or if new bespoke models need to be created to fit the E car requirements.

The Dacia Hipster could foreshadow the future regulations. It’s exactly 3 meters (118 inches) long, 1.55 meters (61 inches) wide and stands 1.53 meters (60 inches) tall, making it smaller than a kei car in every direction except width. Kei car regulations also cap engine displacement to 660 cubic centimeters or maximum power to 64 horsepower.

The Hipster has even less power and tops out at 56 mph (90 km/h), which the manufacturer deemed more than enough for urban driving and the occasional brief highway stint. Dacia says it only weighs around 1,760 lbs (800 kg), but it can still carry four people comfortably inside. The manufacturer projects that a vehicle like this would cost less than €15,000 ($17,600) before any EV incentives are applied, which is exactly where Nikkei says the EU wants to be.

The EU wants to enforce this measure to help local manufacturers produce cheaper cars and convince European buyers not to buy from Chinese manufacturers. However, there may be one flaw in the plan: won’t the same regulations also apply to Chinese carmakers, allowing them to sell cars cheaper than they do today?

BYD, which is the biggest Chinese manufacturer, is currently in the process of dramatically expanding its presence across Europe, and will be able to sell its Seagull (also known as Dolphin Surf) even cheaper if it meets the new E-car criteria. If it doesn’t, nothing is stopping BYD from developing a vehicle specifically designed for that category of car. After all, BYD is the first non-Japanese carmaker in history to develop a kei car, so doing the same for Europe sounds like something it would be more than willing to do.

Even with the import tariffs in place today, which are as high as 45% for some companies, Chinese manufacturers are still able to sell their vehicles in Europe at a competitive price, often undercutting local rivals. Once the new E car regulations are defined, there’s a strong chance they will also allow Japanese carmakers to bring their kei cars to Europe, which will further increase competition in the segment.

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– The InsideEVs team