why the price of petrol and diesel cars is suddenly increasing

We know that from 2035 all new cars sold in Europe must be 100% electric, apart from a few rare exceptions. But this will not happen overnight, and while waiting for this final deadline, the rules will become more and more severe over the years.

A tightening in 2025

As the British press agency reminds us Reutersregulations regarding emissions will already tighten from 1^is January 2025. Thus, by this deadline, electric cars must represent no less than 20% market share in Europe, compared to only 13% at present. A real challenge, since EV registrations are in slight decline on the Old Continent according to a report from Rho Motion. But manufacturers have more than one trick up their sleeve to achieve their ends.

And one of the methods used recently is simply to increase the prices of thermal cars. The goal is simple: to encourage motorists to turn to electric vehicles by charging more dissuasive prices on gasoline and diesel cars. Thus, Reuters explains that Peugeot has increased the prices of all its models, except the electric ones, up to 500 euros. Same thing at Renault, which for example increased its Clio by 3,000 euros. But all models are affected to some extent.

On paper, this strategy may seem coherent, if we put aside the purely ethical aspect for customers. But in reality, everything is not so rosy, and in fact, it could even end up by turning against brands. This is explained by an anonymous source close to a major European car manufacturer. This emphasizes that “ increasing the price of combustion engine cars means reducing production (…) and the entire value chain and suppliers will suffer ».

A solution far from being a winner, therefore, especially in a context where car sales, all engines combined, are generally decreasing. According to the source, “ Rising prices for gasoline cars should help close the gap with more expensive electric vehicles, but given the slow market growth, it may not generate enough electric vehicle sales “. And already, this strategy provokes the anger of some, including Luc Chatel, president of the PFA (Automotive Platform).

Not just negative

The latter does not mince his words on this subject, since he had already spoken before the Paris World Cup in October “ at some point enough is enough […] I cannot sell enough electric vehicles and I will be penalized on my thermal vehicles. What do they want me to make, horse-drawn carriages? “. However, if this strategy could cause harm to manufacturers but above all to customers, everything is not to be thrown away either, quite the contrary. Because if it is well managed, it could even have certain advantages.

According to Denis Schemoul, analyst at S&P Global, “ Price hikes will help fund future EV discounts “. In fact, buyers of thermal cars will indirectly “subsidize” the purchase of zero-emission (exhaust) cars. Some manufacturers have already benefited from this strategy, including Volkswagen, which reduced the price of its ID.3. which fell below the 30,000 euro mark. Enough to allow it to raise its head, while the firm is encountering great difficulties.

However, according to analysts, meeting the European Union’s objectives would be very costly for automobile brands, which could however use various means to make this transition more cleverly. And this in purchasing CO2 credits in particular to some like Tesla, or even by “pooling” their emissions. This is what Suzuki is doing, will join forces with Volvo in 2025, which will allow it to escape the fines provided for by the CAFE regulations from next year.