Dutch end-of-the-year ‘run on EVs’ is probably temporary
In the Netherlands, business drivers still rapidly want to order an electric car because the favorable tax regime will change as of January 1, 2020. The abolition of subsidies might slow down the growth of EV sales worldwide.
During the first three weeks of December, about half of all new cars sold in the Netherlands were fully electric. For the whole of 2019, BOVAG (Dutch automotive sector organization) expects more than 50.000 new electric vehicles to be registered, doubling the number of plug-in cars in the Netherlands in a year’s time.
In 2020, the BMP (Dutch tax addition) rises from 4 to 8%, applicable to the first 45.000 euros of the list price. Until January 1st, however, a rate of 4% applies to the first 50.000 euros for electric cars.
BOVAG estimates that total car sales this year will be between 430.000 and 440.000. This means that about 12% of all newly purchased cars this year will be electric cars. Three of the five electric cars sold this year are Tesla cars.
Worldwide EV sales slow down
During the third quarter of 2019, fewer electric cars were sold worldwide than in the same quarter of 2018. This is a trend reversal, as it is the first time ever EV sales have fallen. In the first half of 2019, IFPEN (French research institute for new energy) calculated that almost 1 million EVs were sold worldwide.
But since the last quarter of 2018, the annual growth rate has slowed down. During the first quarter, growth had fallen below 60%; in the second there was barely 30% growth, and in the third, there even was a 10% drop.
Disappearance of subsidies
The decrease is mainly due to the two largest world markets: America and China. In the States, sales of electric cars fell by 25% in the third quarter after “phasing out federal subsidies”. In China, 19% fewer electric cars were sold in the third quarter, also as a result of the reduction in subsidies.
Only Europe achieved growth of electric cars the third quarter of 2019, 27% more compared to the same period in 2018. For the year as a whole, 364.000 EVs were sold or 3% of total car sales. The increase is mainly attributable to the full electric cars, as plug-in hybrids see their popularity decline (-87%).
“The good performance of the European market is mainly due to the fact that electric cars are still heavily subsidized while ever stricter restrictions are being imposed on cars running on fossil fuels,” IFPEN states. As more and more European countries, including the Flanders region, are also reducing subsidies for electric cars, it looks like sales of EVs will drop here as well.