The European Union is quietly preparing one of its most radical car-market experiments in decades, sketching a new category of compact electric vehicles designed to be cheaper, lighter and easier to build. The goal is blunt: make battery-powered city cars affordable for ordinary drivers while clawing back ground from Chinese manufacturers that have surged into Europe’s showrooms.
Instead of relying only on tariffs and trade defenses, policymakers want to rewrite the rulebook for what an entry-level EV can be, lowering technical requirements so factories can strip out cost without abandoning basic safety. If it works, the plan could reset how Europeans move through their cities and determine whether the continent’s auto industry can keep pace with rivals from China.
Inside the “E car” idea: a new rung on the EV ladder
At the heart of the strategy is a fresh vehicle category often described as an “E car,” a label that signals a step below today’s mainstream electric hatchbacks and crossovers. The European Union is working on a framework that would relax some technical demands for this class, allowing simpler designs, smaller batteries and fewer comfort features so manufacturers can cut prices without abandoning the electric transition. Early outlines suggest these models would be positioned as urban runabouts rather than highway cruisers, with regulators explicitly targeting the gap between expensive full-size EVs and tiny quadricycles.
Reporting indicates that this new class of vehicle, called an E car, would come with lower technical requirements to reduce costs, a shift that The European Unio is weighing as part of a broader affordability push for battery models, according to one detailed account of the EU planning affordable EV class. The concept is not to flood roads with unsafe machines, but to carve out a regulatory niche where stripped-back electric city cars can be legally sold at prices that undercut today’s cheapest compact EVs, while still meeting a core set of crash and emissions standards.
Stripped down to compete: how Europe wants to match China on price
European officials and industry executives know that price is where they are losing the race to China, and the E car blueprint is a direct response to that pressure. Instead of loading small EVs with every possible driver-assistance system and luxury feature, the new class would allow “stripped down” specifications that focus on essential mobility, from a modest range suitable for daily commuting to basic digital interfaces rather than expansive touchscreens. The thinking is that a no-frills electric hatchback that reliably covers 150 to 200 kilometers a day is more useful to many city dwellers than a heavier, more expensive SUV that can cross a continent.
One analysis describes Europe as “eyeing small stripped-down EVs to fight the Chinese onslaught,” with proposals that would let manufacturers pare back equipment and engineering complexity to hit target prices around €20,000, or roughly $23,300 at current exchange rates, a figure cited in reporting by Michael Gauthier. That price band is where Chinese brands have been especially aggressive, shipping compact crossovers and hatchbacks into Europe that undercut local rivals while still offering long range and generous equipment, and the E car category is meant to give European makers a regulatory tool to fight back.
Brussels’ compact EV class: rules written for the city
Behind the scenes, Brussels is shaping the technical backbone of this compact EV class, with a clear focus on dense urban environments rather than long-distance travel. The idea is to define a set of parameters for size, weight, power and safety that reflect how people actually use cars in cities, where speeds are lower and trips shorter, but where congestion and parking are constant headaches. That means regulators are looking at ways to allow smaller footprints, tighter turning circles and simplified crash standards that still protect occupants at urban speeds.
One report notes that The European is reportedly planning to create a new compact electric vehicle class in a bid to undercut rivals from Chi, with the framework explicitly designed to lower production costs for these EVs and make them viable for mass-market city use, according to coverage of the plan to undercut Chinese rivals. Another detailed account explains that Brussels is creating a new compact electric vehicle class to compete with China rivals, with policymakers openly targeting around €20,000 (US$23,200) pricing as the benchmark for success, a figure that anchors the Brussels compact EV class. Those numbers are not incidental; they are a direct response to the sticker prices that Chinese brands have already brought to European forecourts.
The European Commission’s regulatory playbook
Turning the E car concept into reality falls to The European Commission, which is preparing the legal scaffolding that will define what these vehicles can be and how they can be sold. Officials are expected to publish a draft framework that spells out everything from crash-test protocols and battery requirements to software rules and data access, giving automakers a clear target for design and investment. For an industry that plans product cycles years in advance, that regulatory certainty is as important as any subsidy or tax break.
According to one detailed briefing, The European Commission is expected to publish a draft framework for this compact EV class as part of a broader push to cut costs and enable price competition with Chinese brands, a move described in coverage of how the EU prepares a new compact EV class. The same reporting underscores that the Commission sees this as a structural reform, not a one-off incentive, giving manufacturers a long-term regulatory lane for affordable electric models that can be built in Europe rather than imported.
Tariffs as the first line of defense against Chinese EVs
The E car initiative does not emerge in a vacuum; it is layered on top of a hardening trade stance that has already reshaped the EV market. The EU has moved to raise duties on imported Chinese electric vehicles, arguing that heavy state support has allowed Chinese manufacturers to sell cars in Europe at artificially low prices. Those measures are meant to slow the influx of cheap imports and buy time for European brands to adjust, but they also risk retaliation and higher costs for consumers.
One detailed analysis titled Slamming the Brakes explains how The EU Votes to Impose Tariffs on Chinese EVs, describing how member states backed higher duties on Chinese brands and warning that the Trustee Chair in Chinese Business and Economics expects the dispute to shape the market in the months and years ahead, as laid out in the Slamming the Brakes blog. Another report notes that the European Union has decided to hike tariffs on Chinese EVs, prompting a sharp rebuke from Beijing, with China’s Commerce Ministry promising to take “all necessary measures” in response to what it sees as discrimination against Chinese carmakers with unfair state subsidies, a confrontation detailed in coverage of how the EU slaps tariffs on Chinese EVs and Beijing’s reaction. Those moves underline why Brussels is now looking beyond tariffs to structural changes like the E car class.
From duties to design: tariffs alone are not enough
Even as tariffs rise, policymakers know that trade barriers cannot permanently shield Europe’s carmakers from competition, especially when Chinese companies are building factories inside the EU. That is why the new compact EV class is framed as a complement to tariffs rather than a substitute, shifting the focus from blocking imports to enabling local production of genuinely low-cost models. The logic is that if European brands can match Chinese rivals on price and practicality, they will not need permanent protection to survive.
One trade-focused briefing notes that the EU Imposed New Tariffs on China, Targeting Electric Vehicles and Aerial Work Platforms, explaining that on April 28 the bloc raised duties on imported EVs to as high as 45.3 percent, a figure spelled out in the Imposed New Tariffs on China summary. Another overview of What to know about Europe’s tariffs on Chinese electric vehicles describes how the European Union has opened an investigation into Chinese subsidies and is using the threat of additional duties as leverage while it seeks an amicable solution, a process detailed in the What to know about Europe’s tariffs explainer. Against that backdrop, the E car class looks like an attempt to move the battleground from customs offices to design studios and assembly lines.
Sweeteners for “Made in Europe” small cars
Regulation alone will not guarantee that compact EVs are built in Europe rather than imported, so Brussels is also exploring targeted perks for locally produced models. One of the most politically sensitive ideas is to give special treatment to small cars that are manufactured within the bloc, effectively nudging consumers and city planners to favor European-made vehicles in crowded urban spaces. That could mean priority access to parking, loading zones or low-emission areas, all of which are powerful incentives in cities where curb space is scarce.
According to one account, Brussels is to propose special privileges for “Made in Europe” small cars, with a Financial Times report circulating on social media under the headline FT: EU plans special parking rights for “Made in Europe” small cars, and a Reddit discussion noting that the proposal is being overseen by Stéphane Séjourné, as highlighted in a thread about special parking rights for Made in Europe cars. The idea of tying parking rights to origin will be controversial, but it fits a broader pattern of using urban policy to tilt the market toward compact, locally built EVs that align with the E car concept.
Nikkei’s glimpse of the EU’s compact EV blueprint
Some of the clearest hints about how the E car class might work in practice come from reporting that draws on internal EU discussions. Those accounts describe a compact EV category with specific limits on top speed, acceleration and battery size, all calibrated to city driving rather than motorway cruising. The aim is to reduce the amount of raw material and engineering needed per vehicle, which in turn lowers both cost and environmental impact, while still delivering a product that feels like a real car rather than a glorified scooter.
One detailed report explains that the EU is preparing to launch a compact EV class to cut costs and counter China, describing how regulators are working on rules for positioning and signal sudden stops so that even these smaller vehicles integrate safely into existing traffic, a technical nuance highlighted in coverage by Nikkei Asia on compact EV rules. That same reporting underscores that China is the explicit benchmark, with European officials openly acknowledging that they are designing this class to give local manufacturers a fighting chance against Chinese brands that already dominate the affordable EV segment.
Regulators, real-world needs and the promise of cheaper city EVs
For all the geopolitical drama, the E car project is also a response to a simpler problem: many Europeans still cannot afford an electric car that fits their daily lives. Regulators are increasingly aware that the current crop of EVs, often large crossovers packed with technology, does not match the real needs of consumers who mostly drive short distances in crowded cities. By tailoring rules to small, cheap EVs, they hope to unlock a wave of models that are easier to park, cheaper to insure and less intimidating for first-time electric buyers.
One report spells this out bluntly, noting that Regulators want to pave the way for a new class of small and cheap electric vehicles that reflect the real needs of consumers, with preliminary estimates indicating that the cost of such models could be significantly lower if manufacturers adapt already ready-made serial models to the new rules, a prospect described in detail in coverage of how The European Union is considering a new class of small and cheap EVs. That approach suggests the E car category will not require entirely new platforms, but will instead let automakers strip back existing designs to hit lower price points.
Safety trade-offs and the politics of “good enough” protection
No part of the E car debate is more sensitive than safety, because lowering technical requirements inevitably raises questions about how much protection drivers and pedestrians will lose. European crash standards are among the toughest in the world, and they have helped cut road deaths, but they also add cost and weight to vehicles. The new class is an attempt to recalibrate that balance for low-speed urban use, accepting that these cars will be less robust than full-size models while still meeting a baseline of structural integrity and active safety.
One discussion of the proposal puts it starkly, noting that so while they will be less safe than a regular vehicle that has to meet all the safety criteria, they will be considered safer than a car without “safety accessories,” a trade-off described in a forum thread about how the EU is planning a new affordable EV class to counter China. That framing captures the political tightrope Brussels must walk: convincing voters that “good enough” safety in a small city EV is acceptable if it brings prices down and emissions with it, while ensuring that the new rules do not create a two-tier system where lower-income drivers are pushed into less-protected cars.
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