Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Clouds Gather Over the Electric Vehicle Industry

The question arises: if government subsidies are withdrawn in the future, how will the number of electric vehicle purchases develop?
This year, the sales of electric vehicles significantly slowed down: in the first quarter, Tesla's sales decreased by 20 percent, while BYD, considered the largest player, sold 40 percent fewer vehicles compared to the previous quarter. Although, on an annual basis, the sales of electric vehicles have still increased globally, it is at a much slower pace than analysts previously expected.

The unexpected results have been priced into the capital market: since the beginning of the year, the S&P electric vehicle index has fallen by 6 percent, BYD's American depositary receipts have gone down by 4 percent, and Tesla has decreased by 28 percent, underperforming the S&P 500 stock index's performance of 9 percent this year.

DEMAND ISSUES

Analysts believe the slowdown in sales is clearly more due to demand issues. Car dealers say that average car buyers are still skeptical about electric vehicles due to higher prices and the lack of charging station infrastructure. These factors make the use of electric vehicles less convenient compared to vehicles equipped with internal combustion engines or hybrids.

Another possible explanation for the decrease in demand for electric vehicles is that those who wanted to buy an electric vehicle have already done so. Typically, these are individuals willing to try new technology, not necessarily prioritizing the practicality of the vehicle, often also owning a gasoline vehicle, and having the ability to charge the car at home.

Another disadvantage from a sales perspective is that used electric vehicles are difficult to resell, as their residual value cannot be predicted, therefore, car dealers purchase these used vehicles at a discounted rate. Moreover, the insurance and repair costs of electric vehicles in the event of an accident are significantly higher than those for gasoline vehicles.

NORWAY AT 87 PERCENT

Support from governments of developed countries to consumers, such as tax incentives, have generated artificial demand over the past years. A prime example of this is Norway, where 87 percent of new car sales are electric vehicles, for which buyers in the Scandinavian country do not have to pay taxes.

This raises the question of how the number of electric vehicle purchases will develop if government subsidies are withdrawn in the future. In December 2023, the German government, which had spent 10 billion euros on supporting electric vehicles since 2016, suddenly withdrew state subsidies for them. Analysts say that electric vehicle sales in Germany would have to increase sixfold by 2030 to reach the target of having 15 million electric vehicles on the German roads.

The future of the electric vehicle industry is currently very uncertain.

If demand for electric vehicles continues to decline, these stocks will undergo further devaluation.
Newsletter

Related Articles

0:00
0:00
Close
US Warns Israel of Potential Aid Cuts Over Gaza Assistance Delays
Meta Faces Legal Battle Over Teen Social Media Addiction
Russia's Call for a BRICS Financial System Alternative
Only A Third Of Europe's Surface Waters Are Healthy
Taiwan Records Unprecedented Chinese Military Activity Post-Drills
Israel Vows to Limit Retaliatory Strike on Iran to Military Facilities
British Influencer Dies Climbing Spain's Tallest Bridge
Four Killed in Tesla Electric Car Fire in France
Man with Weapons Arrested Near Trump Rally in California
China Conducts Military Drills Around Taiwan: A Strategic Warning
US Deploys THAAD Missile Defense System to Israel
DNA Evidence Suggests Christopher Columbus Was a Sephardic Jew
NASA Launches Europa Clipper Mission to Explore Jupiter's Moon
Tesla's Robotaxi Design Strikes Controversy
Poll Shows Trump Favored Over Harris in Handling Wars
Boeing to Reduce Workforce by 10% Amid Financial Strain
These robotic arms deliver a massage that can be customized to the user's needs
Prospect of UK Rejoining the EU Discussed by Peter Mandelson
Historic Floods Reshape Sahara Desert Landscape
Brazilian Man Arrested for Decades-long Abuse and Imprisonment of Family
EU Plans Sanctions on Iran for Missile Transfers to Russia
Nihon Hidankyo Wins Nobel Peace Prize
Donald Trump Amplifies Anti-Migrant Sentiments in Colorado Speech
Ireland Urges Israel to Cease Fire on UN Peacekeepers in Lebanon
Israel Marks Yom Kippur Under Multi-Front Conflict for First Time Since 1973
Elon Musk Unveils Tesla’s Optimus: The Most Ambitious Product Ever
China Faces Potential Overcapacity in AI Computing Power
China's EV Price War Reaches New Heights
Huawei Surpasses Apple in China Smartphone Sales for First Time in Nearly Four Years
William and Kate's First Public Appearance Post-Chemotherapy
Trump Proposes Tariffs on Chinese Cars to Protect US Auto Industry
This is what a 15 foot hurricane storm surge looks like. It's terrifying
Heads of 9 post-Soviet states gather in Moscow, issue joint statement to the world
The Impact of Online Culture on Young Women: Survey Insights
Hypersonic Jet to Revolutionize Air Travel
Russian Medic Arrested for Alleged Satanism and Promoting LGBTQ Rights
RT has converted key archive speeches delivered by Putin into spoken English using the help of AI
Elon Musk Joins Trump on Stage, Celebrates Free Speech and Slams Biden-Harris Administration
Madonna's Brother Passes Away at the Age of 63
Bill Gates: "6% of global emissions are cows... You can either fix the cows to stop them farting, or you can make beef without the cow."
Facilitated Communication: Miracle Tool or Manipulative Method?
Ukraine to Present 'Victory Plan' at Upcoming Meeting in Germany
Norwegian Police Conclude 'Spy Whale' Hvaldimir's Death Due to Infection
Dominica Sells Citizenship to Boost Climate Resilience
EU Car Industry Faces Severe Downturn
EU Imposes Tariffs on Chinese Electric Vehicles
Spanish F-18 Fighter Jet Crash Claims Pilot's Life
US Army Tests Armed Robot Dogs in the Middle East
Israeli Family Adopts Niece After Hamas Attack
French Court Allows Public Viewing of Video Evidence in Mass Rape Trial
×