Addiction will play out over the coming years as Europe confronts its big automotive rivals. A report titled Effects of the price of electric: Quantitative analysis for OEMS, released this month, highlights that original equipment manufacturers in Europe will feel a sharp squeeze. The study suggests higher costs will push up the price of producing cars by 2023 relative to 2021, with millions more spent on energy and inputs.
The data are striking. The document, prepared by Berylls, a consultant group with offices in Germany, China, the United Kingdom, South Korea, North America and Switzerland, notes that energy costs per vehicle could rise from roughly 300 euros to about 1,200 euros within the next year. This dramatic increase would hit margins and competitiveness across the continent.
It is not a uniform global trend but a European phenomenon that affects the 27-member region most severely. The group’s sources indicate that manufacturers operating in Europe face more pressure from price rises, while North American and Chinese producers encounter comparatively less stress.
In contrast, energy costs in the United States and China have remained comparatively lower, whereas European OEMs found energy costs climbing from about 250 euros per vehicle to around 800 euros in 2022. From year to year, European costs rose by about 447 euros, while North American costs increased by approximately 127 euros; Chinese costs actually fell by a small amount. [Citation: Berylls Report 2024]
Bad forecasts until 2028
The analysis also projects a long horizon to 2028, presenting a cautious view for Europe. While energy-price effects should ease gradually due to national measures, the base reality is that costs per vehicle are expected to stay higher than current levels until at least 2024, averaging around 900 euros per car. Projections show that, even in five-year intervals, costs could remain above previous levels.
This suggests a continued energy-cost gap of roughly 200 euros per vehicle by 2028, a figure that favors North America relative to Europe. It is worth recalling that in 2022 the gap approached 540 euros, and the improvement might be slow enough to strain some OEMs that lack patience or capital to weather a sharp price surge that will be noticeable in the market.
Experts Alexander Timmer and Stefan Schneeberger note that energy costs will influence location decisions in the medium and long term. It is plausible that European production sites could lose appeal and shift to countries with lower costs. The anticipated difference in energy costs between Europe and the United States by 2028 could reach around 30,000 million euros, a figure that not every manufacturer is prepared to tackle.
This scenario could reshape regional production and employment, since Europe produced more cars than North America in 2021 (about 15.4 million versus 10 million). The widening energy-price gap also adds pressure on European operations, including Stellantis Vigo in Galicia, as the cost differential widens and forecasts remain unfavorable.
Stellantis plans to buy part of Symbio
In recent news, Faurecia, Michelin and Stellantis, part of the FORVIA group, announced private negotiations to acquire a significant stake in Symbio, a leader in zero-emission hydrogen mobility. This move positions Stellantis alongside Faurecia and Michelin as a major participant in the hydrogen mobility space.
Stellantis CEO Carlos Tavares stated that Symbio’s technical roadmap aligns with the company’s hydrogen deployment plans in Europe and the United States. The strategy aims to accelerate the development needed to deliver low-carbon products beyond conventional electric vehicles to customers. Faurecia expressed gratitude to the teams at Michelin and Symbio for their dedication and collaboration in achieving innovation and excellence [Citation: Industry press release 2024].