The automotive industry is going through a paradoxical period. While the world is turning to electric, manufacturers continue to bet massively on thermal engines. This surprising strategy hides a complex economic reality that could shake up the automotive market in the years to come.
The paradox of the automobile industry
The future of the automobile seems clear: electric vehicles are set to gradually replace thermal models. However, an unexpected phenomenon is currently occurring among major manufacturers. They continue to invest massively in the development and production of cars with thermal engines, despite environmental and regulatory pressures.
This situation is explained by an unrelenting economic reality: thermal vehicles remain far more profitable than their electric counterparts. Production costs for electric cars remain high, mainly due to the price of batteries. In addition, demand for these vehicles has not yet reached the level hoped for by manufacturers.
Profitability, the sinews of war
The figures speak for themselves: according to a recent study, the difference in production costs between an electric vehicle and an equivalent thermal model can reach 20,000 euros. This colossal disparity endangers the profitability of traditional manufacturers who engage in electricity.
To survive and finance their transition to electromobility, brands have no choice but to continue to sell thermal vehicles in large numbers. These models, whose technology is mature and amortized, generate comfortable margins which make it possible to compensate for the losses generated by the development of electric ranges.
The strategy of French manufacturers
French manufacturers are no exception to this trend. Renault, for example, recently announced its intention to maintain a significant thermal offering in the years to come, while developing its electric range. The Stellantis group, resulting from the merger between PSA and FCA, adopts a similar approach.
This strategy allows manufacturers to respond to diversified consumer demand. Indeed, despite the growing popularity of electric vehicles, many motorists remain attached to thermal engines for practical or financial reasons.
The impact on the French automobile market
The French automobile market therefore finds itself in a particular situation. On the one hand, government incentives are pushing the adoption of electric vehicles. On the other hand, the offer of thermal cars remains predominant and attractive for many buyers.
This duality is reflected in sales. In 2023, electric vehicles represented around 15% of new registrations in France. A figure that is increasing, but which shows that thermal engines retain a predominant place on the market.
The technological challenges of electricity
If manufacturers continue to bet on thermal, it is also because electric technology still faces many challenges. Limited autonomy, long recharge times and the lack of charging infrastructure are all obstacles to the mass adoption of electric vehicles.
Engineers are working hard to resolve these issues. Significant advances have been made, particularly in the field of solid-state batteries which promise increased autonomy and reduced charging times. However, these technologies are not yet mature for large-scale production.
The uncertain future of alternative engines
Faced with this situation, some manufacturers are exploring alternative routes. Toyota, for example, is banking heavily on hydrogen as the fuel of the future. Others, like Porsche, are investing in the development of carbon-neutral synthetic fuels to extend the life of thermal engines.
These options could offer a smoother transition to zero-emission mobility, while allowing manufacturers to make their investments in existing thermal technologies profitable.
The environmental impact of this strategy
The persistence of thermal engines on the market obviously raises environmental questions. Although emissions standards are becoming increasingly strict, internal combustion vehicles continue to contribute significantly to greenhouse gas emissions.
To mitigate this impact, manufacturers are focusing on hybridization. Mild-hybrid and full-hybrid technologies make it possible to significantly reduce the consumption and emissions of thermal vehicles, thus offering a compromise between environmental performance and economic profitability.
Medium-term prospects
According to expert forecasts, this paradoxical situation is likely to persist for several more years. Manufacturers will need time to optimize their electric vehicle production processes and reduce associated costs.
Until then, the French automobile market, like that of many other countries, will continue to be dominated by a mixed offer, where thermal vehicles will rub shoulders with electric and hybrid models. This diversity will make it possible to meet the varied needs of consumers while ensuring the gradual transition to more sustainable mobility.
The automotive world finds itself at a historic crossroads. The continued coexistence of thermal and electrical technologies will shape the industry in the years to come, providing consumers with unprecedented choice. The balance between economic profitability and environmental imperatives will remain at the heart of manufacturers' strategies, thus shaping the future of our mobility.
SRQ Backlot