Categories
Energy

Are Incentives the only reason why Electric Vehicles sell?

Over the years, electric vehicles have been experiencing exponential growth of about 60% between 2012 and 2019. However, since 2019, sales for these plug-in vehicles seem to be stagnating even though the year started well with a five percent increase. This is a worrying trend if electric mobility is to supplant internal combustion as early as 2030 or up to 2040. Even though EV sales are doing exemplary well in Europe, with the continent recording a significant 47% growth worldwide, the sales have been significantly worse.  The world’s largest automotive markets, China, and the United States, have been recording a decrease in sales of the plug-in vehicles. In China, battery electric vehicle sales were down 4% while in the US, the sales were down a whopping 9%.

In the United States, the sharp decline in sales is a result of the fall in fuel prices. The low demand for oil made the fuel price to drop, making it very much affordable to gas-guzzling pickup users. This was more convenient for conventional car users as electric vehicles are still expensive. The fall in China is somehow surprising. The Peoples Republic is a global leader in electric car development and adoption but has been shifting to hydrogen fuel cells as competition for BEVs. The promising market has also been struck by a reduction in subsidies for the program by the government, citing concerns such as cost reduction, economies of scale, and open, equal market. A lack of enough charging stations in both countries, especially the US, has also been a contributing factor to the plunge in sales, as there isn’t enough infrastructure to support electric vehicle owners. 

Contrary to the US and China, sales for BEVs have been sky high in Norway, thanks to the government’s incentives to the industry. The Scandinavian oil producer sold a whopping 56% of pure EVs on total auto sales in 2019. Norway has a comprehensive charging network and also has a firm commitment to environmental conservation. What is fueling this revolution in Norway is the government’s incentivization on electric vehicles. Conventional vehicles have a 63% tax more than electric cars. For example, it will cost you $ 35,010 for a regular Volkswagen, while the electric version of the same is only $30,590. So the question is, why will Norwegians buy a conventional car while the government is giving EVs for free? This price advantage is a complete reversal in Canada, where EVs cost more than traditional vehicles. 

Incentives alone will not do much if the world is to go electric entirely; the industry and the government need to come up with better solutions.

Leave a Reply

Your email address will not be published. Required fields are marked *