ล koda CEO Warns Battery Costs, Chinese Competitionโ Threaten European Automakers
PRAGUE – ล koda Auto CEO Klaus Hoffman has cautioned that the rapid shift to electric vehicles, coupled with increasing competition from Chinese manufacturers and โreliance on Asianโฃ battery โฃtechnology,โ is creating significant โchallenges for European automakers.He warned that failing to drastically reduce โbattery โcosts could jeopardize the affordability of electric vehiclesโ and hinder wider adoption.
Hoffman stated that competitive pressure isโ primarily coming from Tesla and Chinese manufacturers, noting China’s export growth has “started to grow rapidly in the last โฃfour years.” He added,”China is only using half ofโ its production capacity so far and wants to use the other half as well.”
A key issue, according to Hoffman, is battery development. While ล koda controls โคits supply chain for customary engineโค and gearbox components, the battery sector is dominated โคby Asian suppliers. “Everything โฃis in the hands of Asian suppliers and chains. Today we buy half of the batteries from China, the other half we try to supply โfromโฃ our production.โฃ But the technologies for the productionโข of batteries are also from China,” he said. He emphasized the need โto reduce battery prices by 45 percent per kilowatt hour within the next fiveโ years, stating, “Otherwise, we can’t make a product that people will wantโค to buy.”
Hoffman also highlighted China’s innovation in automotiveโ production, specifically citing the digitization of manufacturing processes โขand a less restrictive regulatory habitat. “Nobody there [in China] is dealing with GDPR, the use of private phones at work. Legislationโค prevents us, for example, from deploying cameras on production lines,”โฃ he explained.
While acknowledging China as a growing competitor, Hoffman argued against protectionist measures for the โคEuropean automotive industry. Though,โฃ he anticipates European dealers will “definitely feel how China will flood the market in Europe.”
The โคchallenges facing European manufacturers are reflected in recent production adjustments. Toyota Motor Manufacturing Czech Republic will exclusively produce hybrid cars fromโฃ this year. Hyundai’s sole โขEU production plant in Noลกovice,โ Czech Republic, has announced three additional all-day production shutdowns next week, adding to several alreadyโ scheduled thisโฃ year, due to lower demand.
