The U.S. electric vehicle industry is in a crisis.
The Trump administration has walked back government support for the industry and found itself caught up in a trade war that is putting a strain on both EV consumers and manufacturers. In response, demand is facing a rapid slowdown, and manufacturers are increasingly pulling back. General Motors said in a filing this month that it would take a $1.6 billion hit on its quarterly earnings due to the drop in value of its EV operations. Ford CEO Jim Farley indicated that the company will pivot to focus on partial electrification instead of fully electric models.
But the story differs when you look at the industry globally. Global electric vehicle sales hit a record 2.1 million in September, according to market research firm Rho Motion. That record was only partially driven by U.S. buyers rushing to get electric vehicles before the end of the electric vehicle tax credit.
Also driving the record was strong sales in China, which accounted for about two-thirds of all sales worldwide. September is traditionally referred to as the golden month of auto sales in China, as carmakers tend to launch new models around this time.
China has been the frontrunner of the global EV race for some time now, thanks to consistent support from Beijing in the form of subsidies and other infrastructure incentives. At this point, the country is overproducing electric vehicles and has gone full speed into exports.
Exports of “new energy vehicles,” which include both EVs and plug-in hybrids, surged by 100% in September, according to the China Association of Automobile Manufacturers’ latest data.
Earlier this month, the United Kingdom became the largest foreign market of BYD, which is not only one of China’s but also the world’s leading EV manufacturers.
Europe, on the other hand, was also a big driver behind the global record. EV demand on the continent hit a new high in September. Europe also offers various tax benefits and incentives for its electric vehicle industry, and the European industry’s sales numbers trump those in the United States.
The U.S. is only bound to fall further behind the rest of the world when it comes to the EV race. Much of that is thanks to these two political developments: the end of government subsidies for the electric vehicle industry and the escalating trade war with China.
End of the EV tax credit
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