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The question arises: if government subsidies are withdrawn in the future, how will the number of electric vehicle purchases develop?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.


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.


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.

Related Articles

Russia Accuses Ukraine of Using Chemical Weapons
Ursula von der Leyen Wins Second Term as European Commission President
Police Officer Injured in Attack in Central Paris
Record Heat Temperatures in Ukraine Amid Power Crisis
Japan to Allocate $3.3 Billion to Ukraine Using Frozen Russian Assets
EU Parliament Condemns Hungarian PM's Russia Visit
FBI Struggles to Find Motive Behind Trump Shooting Incident
Kremlin Criticizes EU Rejection of Orban’s Ukraine Peace Proposal
Russia's Electronic Warfare Neutralizes Western Weapons in Ukraine
Trump Challenges Biden to Debate and Golf Match
Macron Accuses Israeli Minister of Election Interference
US Senator Highlights Weaknesses in Western Military Industry During Ukraine Conflict
George Clooney Urges Biden to Withdraw from Presidential Race
Political Shift in the UK: A Detailed Analysis of Labour's Victory and Future Prospects
Viktor Orbán's Peace Mission: A Diplomatic Controversy in the EU
India Advocates Peace and Prosperity: PM Modi's Speech in Austria
New UK PM Keir Starmer Reaffirms Strong Support for Ukraine at NATO Summit
Spain PM Pedro Sanchez Denounces Double Standards on Gaza at NATO Summit
Sunita Williams Safe on ISS, to Address Earth on July 10
Biden Affirms Commitment To Presidential Race
France Faces Political Turmoil and Airport Strikes Ahead of Paris Olympics 2024
Putin Hosts PM Modi for a Private Meeting
Boeing Pleads Guilty Over 737 MAX Crashes
2024 Predicted to Be World's Hottest Year
White House Denies Biden Being Treated for Parkinson's Disease
Biden to Meet New UK Prime Minister Keir Starmer
Biden Insists on Continuing Presidential Race Amid Criticism
UK Defence Minister Pledges Enhanced Support to Ukraine
French Prime Minister Gabriel Attal Resigns After Election Setback
Macron Faces New Political Challenges Despite Election Relief
France's Far-Right Falls Short in Parliamentary Elections
Key Figures in France's Left-Wing New Popular Front Bloc
Voter Discontent in Recent UK and French Elections
EU Charges Meta with Breaching Antitrust Rules
French Elections: Battle to Thwart Far-Right Takeover
Belgrade Police Arrest Man with Crossbow Following Embassy Attack
Hunter Biden Sues Fox News Over 'Revenge Porn' Allegations
Far-Right Gains in French Legislative Elections Challenge Macron's Rule
Clashes and Arrests at German Far-Right AfD Congress
Turkey Removed from Financial Watchdog's Grey List
Labour's Potential Impact on UK-EU Relations
Belgium Legalizes Job Contracts for Sex Workers
Swedish Town Göten Offers Land for 10 Cents Per Square Metre
Le Pen Questions Macron's Military Authority Ahead of French Election
Six Killed in Slovakia Train-Bus Collision
Reform UK Candidate Leslie Lilley Makes Controversial Statements About Migrants
95-Year-Old 'Nazi Grandma' Convicted Again for Holocaust Denial
WikiLeaks Founder Julian Assange Returns to Australia as a Free Man
Dutch PM Mark Rutte Appointed as NATO Secretary General
Australia's Diplomacy Secures Julian Assange's Freedom