Hyundai Europe’s CEO, Xavier Martinet, has expressed support for the European Union’s proposed M1E vehicle category—designed to facilitate the production of more affordable small cars. However, he emphasized the need for precise details on how the framework will ensure profitability for manufacturers. The initiative aims to lower production costs by relaxing certain regulations for smaller vehicles, reducing the required technology and equipment, and ultimately lowering prices for consumers.
The M1E Framework: A Potential Game-Changer
The EU’s M1E category is intended to simplify legislation for small cars, making them cheaper to build. This move has been welcomed by multiple automakers, including Dacia, BYD, Peugeot, and Citroën, all of whom are considering new entry-level electric vehicles pending regulatory confirmation. Hyundai agrees with the principle of relaxed regulations if the EU aims to provide more affordable EVs to European customers.
Martinet pointed out that the key question remains: exactly which rules will be relaxed? He specifically asked whether the changes would affect safety standards or engine specifications, noting that some stakeholders have even suggested a return to internal combustion engines (ICE) for small cars, though this is not the current intent of M1E.
“The question I have about the regulations is: which ones do you want to take away? Is it safety? Is it some of the engine specs?”
Overregulation in Europe Compared to Global Markets
According to Martinet, the European automotive industry is significantly more heavily regulated than its counterparts in other global markets, particularly the United States. He argued that the increasing regulatory burden over the years has driven up vehicle costs.
The CEO highlighted that Europe is “regulating the market way too much versus what the others are doing.” This overregulation has created a cost disadvantage for European manufacturers and limited affordability for consumers.
Hyundai’s Position: Building on Existing Success
While Hyundai has not confirmed plans to launch a new city EV under the M1E framework, Martinet pointed to the success of the Inster—the firm’s most affordable EV—as evidence of their strength in the small car segment.
The Inster, already popular in Europe, demonstrates Hyundai’s ability to deliver affordable EVs that meet customer needs in terms of range, equipment, and price. The M1E category could further strengthen this position by streamlining regulations and lowering production costs.
The EU’s M1E initiative represents a crucial step towards improving affordability in the European auto market, but its success hinges on clear and detailed regulatory implementation. Without such clarity, automakers will remain hesitant to commit to new affordable models.
