Western car manufacturers are worried about the “invasion” of cheap Chinese electric cars in Europe, so on Thursday the French manufacturer Renault announced that it wants to reduce its production costs for its electric vehicles by 40%, reports Reuters.

CFO Thierry Pieton said the best way for Renault to counter price competition is to reduce its own development and production costs.

Even though the 40% cost reduction target is set for the period after 2027, CEO Luca de Meo said that the Renault group will try to achieve lower production costs from the second half of this year, thanks to the cost reduction of the raw materials. “It is clear that we are in a competition, and time is very important, but this is the field in which we operate”, said Luca de Meo, according to Agerpres.

Chinese manufacturers such as BYD and SAIC have invested heavily in the transition to clean mobility, taking advantage of lower labor costs and local battery suppliers to get ahead of many rivals. In 2022, Chinese manufacturers controlled 9% of the European electric car market, almost double the share in 2021, according to consulting firm Inovev, which warns that the advance of Chinese manufacturers is accelerating.

Carlos Tavares, general manager of the Franco-Italian car manufacturer Stellantis, also warned on Wednesday that the competition with Chinese manufacturers will be “extremely brutal”. “Their cost competitiveness is 25 percent compared to us. We have to fight,” said Tavares, who described the advance of Chinese manufacturers as an “invasion.” According to Tavares, Western automakers must use “the same weapons” as their Chinese rivals, sourcing components from low-cost countries and partnering with battery suppliers that offer the best combination of power, cost and weight.

“This means that we have to come up with acquisition proposals that allow us to sell cars like the Citroën C3 at 25,000 euros profitably,” said Carlos Tavares.