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Oct 8, 2019,  by Allianz Partners Business Insights

Electric cars: Government subsidies cut while sales drop

Last July, electric car sales were found to have dropped by 14% worldwide for the first time. Government subsidy cuts are thought to be responsible. The drop is particularly noticeable in China and the United States, where funding has been reduced, but sales remain stable in Europe.

Can electric cars become more widespread without help from the government? Not likely, reckon BFMTV, who reported that zero-emission car sales have fallen for the first time. According to the latest figures from Bernstein, relayed by Bloomberg, the world’s electric cars sales had dropped by 14% in July, to just 128,000 vehicles: an all-time low. 

 

A market that relies on subsidies

 

Analysts from Bernstein believe that this is down to cuts made in the subsidies awarded to purchasers. The United States and China recently reduced the funding they give to encourage people to buy an electric vehicles.

"Unsurprisingly, the growth momentum halted in July amid subsidy cuts,” resumed the research analysts. Sales are on the rise in Europe, however, with 173,000 new electric vehicles registered in the first half of 2019.

 

Europe is holding steady

 

Norway leads the way for sales, both in terms of market share and volume (36,255 cars registered, equivalent to 37.1% of the market), according to figures provided by JATO. Next comes Germany (32,990 cars) and France (24,228 cars), two countries that have maintained their subsidies.

Despite this drop in sales, Bernstein remain optimistic and think that the demand for electric vehicles will increase over the long term. Some new models, such as the Mini Cooper SE, have already proven popular, with 45,000 vehicles pre-ordered.

 

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