Worldwide e-car sales down for the first time
For the first time, worldwide sales of e-cars are down, according to a report by Sanford C. Bernstein. In July of this year, 128.000 electric and plug-in hybrid cars were sold, 14% less than in July 2018.
Analysts mainly see a drop in China, the biggest market for e-cars accounting for 46% of worldwide sales. In July, the e-car market there was a quarter smaller. The US also saw a decline in sales. Only in Europe, people bought more e-cars, a necessity if manufacturers want to reach their CO2 targets.
Despite the decline, Sanford C. Bernstein does expect the e-car market to grow by between 23% to 48% in 2019. In 2018, growth was 64%.
While relatively speaking, e-cars are still doing well in China, sales are down nevertheless. This has a lot to do with the decision of the Chinese government to cut subsidization for electric cars. Chinese e-car buyers now get 50% less financial support for vehicles with an electric autonomy of more than 400 km. For vehicles with a lower autonomy, subsidies have been completely abolished. From next year on, all subsidies will be dropped, and manufacturers will have to respect the production quota for zero-emission cars.
China spent an estimated 60 billion dollars on subsidizing Chinese e-car manufacturers between 2009 and 2017. BYD, the country’s biggest e-car manufacturer and the worldwide number two after Tesla, received around one billion dollars. Since the change in subsidization, the company has lowered its production objectives by 40%.
The Chinese car market, in general, is cooling down since last year. In 2018, sales declined for the first time since 1990. One of the reasons is the Chinese-US trade war, which harms the economy and consumer confidence.
The US is also lowering e-car subsidies. Until now, they mainly supported the growth of Tesla. Last year, Tesla buyers got a tax reduction of 7.500 US dollars. Because the manufacturer sold more than 200.000 cars last year, subsidies were halved in the first six months of 2019. In the second half, buyers are left with a quarter of that amount before it is entirely cut for 2020.
The tax benefits for Tesla buyers in the US were often criticized for benefiting the wealthy. Those with enough money to buy an expensive Tesla were given money paid for by the rest of the population.