BBC Comes to Terms With Collapsing EV Market

Written by Sallust on May 23, 2024. Posted in Current News

The BBC is confronting the possibility that the once promising surge in sales of EVs is going flat.

Naturally, this is starting to cause a panic because all those pesky climate targets enshrined in law aren’t going to be met. Range anxiety and costs are the two most serious obstacles.

Only cheap EVs will plug the gap but the tidal wave of lower-cost Chinese imports will wreck domestic manufacturers, and the only solution to that on the table is tariffs. Here’s the story:

Buoyant electric car sales are a must if we’re to hit our climate targets. But EV sales in the West are down and if governments want them to recover it may have to be at the expense of their own economies.

By 2035, the International Energy Agency (IEA) says there will need to be 790 million EVs if we’re to hit Net Zero by the middle of the century.

That implies growth in sales of 27% every single year.

China’s largest EV manufacturer BYD has been vying with Tesla for the number-one spot. BYD also saw a slowdown between January and March.

And EV sales in Europe fell more than 10% year-on-year in the final quarter of last year – although in the U.K. total sales are running up on last year.

That’s why the fact that global sales of the world’s largest EV maker, Tesla, were actually lower in the first quarter of 2024 than in the same period in 2023 has raised eyebrows.

In the U.K., analysts say strong EV sales in recent years were fuelled by company car purchases, thanks to generous tax breaks.

But the household market is proving a tougher nut to crack, with people saying they are mostly put off by the high cost. The average price of a new EV in the US is over $60,000 (£47,433). Prices are similarly high in Europe and the U.K.

Large state subsidies and greater production efficiencies mean the average cost to a Chinese consumer is just $30,000. And BYD’s Seagull hatchback sells for less than $10,000.

China is also making massively more EVs than its domestic market needs – it could easily flood the U.S. and European markets with cheap cars if they weren’t held back by tariffs.

Here is the dilemma for European and U.S. politicians. They want cheaper EVs to facilitate the climate transition, but not at the cost of undermining their own car manufacturers – the likes of Ford and Volkswagen – and local jobs.

In fact, the talk is actually of raising tariffs and other trade barriers on imports to keep out ultra-competitive Chinese EVs.

That’s precisely what U.S. President Joe Biden did this week with a new 100% tariff on Chinese EV imports.

Apparently, the hope is that second hand sales will expand the use of EVs. But as any reader of this website knows, the unlikely prospect of there being any secondhand market in EVs at all is a whole other story. EVs are set to be one-owner commodities, like a washing machine or vacuum cleaner.

If prices of new EVs stay where they are then there is a rocky road ahead:

If that happens, expect that tension between the desire of Western governments to decarbonise transport and their desire to protect domestic manufacturing champions to grow even more acute.

At some stage they might be forced to choose.

Well, who could possibly have anticipated that? Worth reading in full.

See more here Daily Sceptic 

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