Electric Vehicle Sales Fall After China Scales Back Subsidies
From a market perspective, China dictates a lot of what happens in the automotive industry. That especially holds true for electric vehicles. With the government doubling down on emissions regulations, automakers have had to regroup and introduce battery-powered cars or see their sales dwindle. For the most part – China's plan worked. Consumers purchased large amounts of EVs and they were extremely popular. Recently, though, China rolled back its purchase subsidies for electric cars and sales fell.
Electric Car Sales Tumble
According to Bloomberg, global electric-car sales fell for the first time after China scaled back its subsidies . The change in pace highlights just how large of a role government assistance plays in electric vehicle sales. The outlet cites Sanford C. Bernstein that reports monthly EV sales fell by 14 percent last month. Only a total of 128,000 plug-in electric vehicles were sold in July. While EV sales fell in China and North America, sales actually increased in Europe.
The decline in sales came after China decided to reduce funding for individual purchase of new-energy vehicles on June 26. The decision was made in an effort to encourage automakers to focus on innovation. Unfortunately, the reduction in electric-vehicle subsidies and a slowing economy have turned consumers away from EVs.
A 14 percent decrease isn't small and it doesn't bode well for automakers, as they continue to pour millions into coming out with more electric vehicles. As the outlet points out, automakers are expecting battery-powered vehicles to be the next big thing and a decline in sales doesn't paint a good picture for the future. The situation is even more precarious when you consider that sales of gas-powered vehicles aren't doing too well either.
Just A Hiccup?
Before July, global electric sales were doing extremely well. Bernstein claims that figures were up by 35 percent. Despite the setback in July, researchers still believe that 2019 will be a good year for EV sales. By the end of 2019, 2.9 million EVs are expected to be sold, which is up from 2.4 million from last year.
"Unsurprisingly the growth momentum halted in July amid subsidy cuts, Bernstein analysts stated in the report. "Despite expected short-term weakness in 2H19, we continue to be positive on long-term EV demand."
Dissecting the sales further, Bernstein's report claims that Tesla dominated electric-car sales, accounting for 20,000 units sold in July alone. China's BYD was close behind with 16,000 units sold. BMW and another Chinese company, BAIC, accounted for 9,000 and 8,000 electric vehicle sales respectively. All other brands accounted for 75,000 electric car sales.
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