EV sales decline: a global reality check

Now the shine and allure of being the ‘new fad’ And government subsidies are starting to wane – along with a market full of oversaturated competition and robust supply – electric cars simply aren’t selling.

That was the subject of a new FT report which claims the car industry’s shift to electric vehicles, once seen as essential, now faces serious challenges.

For example, the report notes that Northvolt, Europe’s largest battery maker, filed for bankruptcy last week, casting doubt on the region’s industrial strategy. In addition, Stellantis announced the closure of its UK van factory, putting 1,100 jobs at risk, while Volkswagen and Ford also warned of significant job losses and factory closures due to weaker-than-expected demand for electric vehicles.

And as we noted earlier this week, GM is taking on a $5 billion charge to reorganize its China operations.

Now the US is in danger of falling further behind in the green transition, as electric car adoption lags and newly-elected President Trump’s plans to cut subsidies threaten progress. While President Biden aims for electric vehicles to make up half of new car sales by 2030, they accounted for just 10% last year, according to FT.

And automakers have scaled back production plans, with U.S. EV production expected to drop by 50% next year and European plans by 29%, Bernstein said. By 2025, the EV market share is expected to reach 23% in Europe and 13% in the US

FT reported that slow growth in EV usage worldwide stems from high upfront costs, concerns about range and charging infrastructure, and fading energy price benefits due to geopolitical tensions.

Due to rising interest rates, leasing costs have risen further. In Europe, electric vehicle prices have risen from €40,000 in 2020 to €45,000 today, well above the €20,000 that many consumers are willing to pay.

Meanwhile, inconsistent government subsidies have led to uneven adoption, with Germany and France cutting incentives, raising concerns about falling electric vehicle sales and job losses in the auto industry.

China, on the other hand, has successfully integrated its EV strategy, using state-backed initiatives, subsidies and a robust supply chain to dominate the market. More than half of new cars sold in China are now electric cars or plug-in hybrids, helped by competitive prices and innovative car technology.

Europe, limited by free market principles, cannot match China’s state model and has resorted to imposing tariffs on Chinese imports of electric vehicles. Despite setbacks, carmakers in Europe remain optimistic and are planning affordable EV models under €25,000 to meet stricter emissions targets, aiming to balance cost reductions with growing consumer interest in electric technology.

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