Without purchase aid, there is no electric car: after Norway and China, now sales are also punctuating in Germany

Sales of electric cars are more or less buoyant depending on the country. From the overwhelming 84% of sales in Norway to the timid 4% in Spain, passing through 22% in China, in all of them there is a certainty, the purchase of electric cars and plug-in hybrids PHEVs is encouraged.

However, some indicators suggest that these sales are artificially maintained thanks to green bonuses and other purchase aids, which drastically reduce the price of these cars, which are more expensive than their gasoline, diesel or hybrid alternatives.

It has already happened in Norway , but also in China and Germany .

Without purchase aid, there is no electric car

With a market share of over 84%, Norway is the world champion in electric sales. And after decades of aid of all kinds, this 2023 the Scandinavian country has cut aid.

The decline in tax collection has led Norway to cut aid, not eliminate it. And incidentally it has caused record sales in 2022 and a record drop in 2023. To the point that the sales of January 2023 are similar to those of January 1962.

In Germany , the maximum amount of the government's green bonus for the purchase of an electric car was reduced from 6,000 to 4,500 euros on January 1, 2023. And in the first month of this year, sales of electric cars in Germany fell around 13% compared to the same period in 2022 (and PHEVs fell 52%). In the month of January 2023, 179,247 cars were registered, of which just over 10% (18,136 units) were electric.

According to the VDA (German Association of the Automotive Industry), sales of electric cars could continue to fall as a result of the reduction of these aids. The organization calls for the development of infrastructure to support the electrification of the market to be accelerated.

In China , a country in which 22% of sales made in 2022 were plug-in cars, the central government completely eliminated subsidies for the purchase of a New Energy Vehicle (known as NEV, for its acronym in English). Electric cars fall into the NEV category, but also PHEV plug-in hybrids.

The end of aid in China led the market to contract 38% this January , with a 6.3% drop in NEV sales. As for the 100% electric vehicles that make up the NEV, according to the first data from the China Tourism Car Association (CPCA), sales fell by 43% in January 2023 compared to January 2022, selling something in this first month of the year. more than 304,000 cars, in a month in which 1.6 million cars were sold (and more than 1.46 million cars were registered).

A possible price war to continue selling electric cars

The end of purchase aid in China has also been the trigger for a price war in China initiated by Tesla . The reduction in the price of Tesla has allowed the American brand to weather the storm. Its sales in January 2023 were 18% higher than those of December 2022, when those of the rest of its Chinese rivals fell significantly.

The rest of the Chinese brands with electric cars in their ranges also began to lower prices, offer discounts or more standard equipment in their cars to compensate for the end of the aid and counteract Tesla's price drop.

Whichever way you look at it, the vast majority of electric cars these days are much more expensive than their gasoline equivalents . Except for the Dacia and MG proposals , it is rare for an electric car to drop below 35,000 euros, with most models with decent autonomy starting at 40,000 euros. This puts them out of reach for many drivers, despite the hefty subsidies on offer.

With more and more rivals in Europe and aid beginning to be cut, Tesla announced in early January price cuts of up to 20% in Europe and the United States, as it did in China. Ford quickly followed suit on both sides of the Atlantic. They are still expensive models, but they have opened the season.

Faced with the cut in aid, the arrival of new rivals, mainly Chinese, who plan to produce in Europe and the need to comply with increasingly strict European CO2 emission standards, manufacturers could follow a similar path to gain market share. market, according to German analyst Matthias Schmidt.

The problem is that not all manufacturers will be able to join a price war, let alone endure it over time. Only a few could put up with it, including Tesla, which has achieved gross profit per car of more than $15,000. It's twice what Volkswagen gets, four times what Toyota gets, and five times what Ford gets.