Asia Tech Wire (Aug 13) -- Citi analysts said in a report that it's clear that European automakers have been overly optimistic in their price and sales expectations for all-electric vehicles, so they should cut back on their investments now.

Electric vehicle penetration growth in Germany, Europe's largest economy, has slowed, falling 1.9% year-on-year in July, Citi noted.

They added that sales of purely electric vehicles in Germany fell 13% year-on-year in July this year.

While analysts have maintained their market share forecasts for zero-emission vehicles this year and next, overly optimistic expectations pose a risk to automakers that they may fall short of EU climate targets.

Meanwhile, losses on purely electric cars are too high, requiring investment cuts, which are indeed happening.

China's expertise and more prominent role in hybrid and hydrogen-powered vehicles will be key to future growth, the analysts added.