Written byQian Yaguang.
EditZHANG Nan.
DesignZhao Haoran.
2024 is approaching, but the momentum of rapid development of global new energy vehicles may no longer be sustained.
Global EV sales hit a record high of 1.4 million units in November, up 20% year-on-year and setting a new monthly sales record, according to market research firm Rho Motion. Of these, 70% are battery electric vehicles and 30% are plug-in hybrids.
According to data from the China Association of Automobile Manufacturers, China's new energy vehicle sales reached 102 in November60,000 units, more than two-thirds of the global market, an increase of about 31%, and the penetration rate of new energy vehicles exceeded 40%. From January to November, the sales volume of new energy vehicles reached 83040,000 units, a year-on-year increase of 367%；New energy vehicle exports 10910,000 units, a year-on-year increase of 835%。It is expected that the number of new energy vehicles will reach about 11.5 million this year.
In November, the sales volume of new energy vehicles in the seven major European countries was 1990,000 units, down 131%, an increase of 149%, with a penetration rate of 245%；U.S. NEV passenger car sales reached 1200,000 units, a year-on-year increase of 357%, an increase of 16%, with a penetration rate of 94%。
With leading electrification and intelligent technology, a strong first-class chain system and a huge market foundation, China's new energy vehicle industry has made great progress and entered a stage of healthy development under the condition of canceling state subsidies.
In the other two major auto markets, Europe and North America, although the sales and penetration rate of new energy vehicles are still growing this year, there is a trend of slowing demand.
The growth of the electric vehicle market in Europe and the United States has slowed down
In the first three quarters of this year, the sales of pure electric vehicles in the European market surged by 47% year-on-year, but since September, the growth rate has slowed significantly. The previous surge has also been questioned by a number of data analysis agencies that it may be just an illusion, believing that the growth of electric vehicles in Europe has entered a bottleneck period.
Langston, a consumer data analysis company, believes that the growth of pure electric vehicle sales in Europe is only digesting the backlog of orders generated by the bottleneck of the previous ** chain, and cannot reflect the real consumer demand. According to their polls, German consumers' willingness to buy electric vehicles has not increased over the past year.
The Financial Times sorted out the reasons for the weak demand for new energy vehicles in Europe and the United States. On the one hand, new energy vehicles were quite fresh at the beginning, attracting some consumers, but now new energy vehicles want to further develop the market, they have to face more consumers and higher requirements. Since the launch of new energy vehicles for a period of time, news such as slow charging and spontaneous combustion of vehicles has also affected consumer confidence.
On the other hand, the policy also has a huge impact on the market trend. Earlier this year, the European Union announced that it would continue to sell new fuel vehicles using synthetic fuels after 2035, and the United Kingdom also decided to postpone the ban from 2030 to 2035.
Carlos T**ares, CEO of Stellantis, predicts that after the European Parliament elections in June next year and the two key elections in the United States in November, the political situation will be different from what it is now, and it is likely that the political level and the public will no longer favor electric vehicles, and the pace of electrification may slow down.
This judgment is supported by data from the Volkswagen Group, which has seen its EV orders in Europe fall from 300,000 units in 2022 to 150,000 units today.
Bloomberg**, the sales growth rate of the European auto market is expected to reach double digits this year, about 14%;However, there are also many risks, such as the risk of an overall economic downturn remains high, and consumer demand for electric vehicles is weakening due to factors such as declining subsidies and imperfect infrastructure.
BI analysts Gillian D**is and Michael Dean said in a note that the market share of battery electric vehicles in Europe is expected to be 18% in 2024, an increase of only three percentage points. UBS lowered its forecast for the growth of electric vehicle sales in Europe in 2024 to 15 from 25 previously.
In the United States, although the important milestone of 1 million electric vehicle sales has just been ushered in, the demand for electric vehicles in 2023 will not meet expectations due to factors such as industrial chain support, geopolitics, and consumption habits.
A survey by S&P Global Mobile in the U.S. shows that while the average EVs** are increasingly moving closer to gasoline-powered vehicles, the lack of purchasing power remains the main reason consumers are reluctant to embrace EVs, even in regions where EVs have already gained significant market share.
Fox News reported that more than 3,000 car dealers in the United States signed a joint letter calling on Biden to halt his radical electric vehicle development plan. In the letter, they wrote: "Now that a large number of unsalable electric vehicles are parked in our parking lots, the market has given the best answer. ”
U.S. consumers are not entering the EV market now due to a lack of charging infrastructure, unstable power grids, and a lack of reliable minerals** that are critical to EV batteries, and that EVs** are 20 to 30 percent more expensive than gasoline vehicles, these dealers said.
Forbes pointed out that the decline in the demand for electric vehicles in Europe and the United States indicates that the European and American electric vehicle markets may have entered a "plateau period". The lack of subsidies for premium models, increased consumer sensitivity, and higher EVs** compared to gasoline-powered vehicles and inadequate charging infrastructure are cited as contributing to the slowdown.
Some industry insiders pointed out that the current sales boom of electric vehicles in Europe and the United States is only a product stimulated by subsidies, and once the subsidies are withdrawn, the demand bubble that relies on high subsidies will burst.
With the decline or cancellation of electric vehicle subsidy policies in many countries in Europe and the United States, the popularity of electric vehicles is slowing down or is about to slow down when the industrial chain is not perfect and various drawbacks have not been solved.
German subsidies came to an abrupt end
Germany's Federal Ministry for Economic Affairs and Climate Protection (BMWK) announced on December 16 that it would end its electric vehicle subsidy program and would stop accepting new applications for electric vehicle subsidies on December 17, while applications accepted before December 17 will still be accepted and approved.
The emergency brake on this subsidy stems from the budget crisis in November**. At that time, the German Constitutional Court ruled that the transfer of 60 billion euros to a special ** program dedicated to climate and transition projects was illegal. This results in a shortfall of 17 billion euros in the German federal budget for 2024. In response to the budget shortfall, Germany** has decided to cut subsidies for industries such as electric vehicles and solar energy.
Since 2016, Germany has paid around 10 billion euros in subsidies for around 2.1 million electric vehicles, which has greatly boosted the development of electric vehicles in Germany, which was originally scheduled to last until the end of 2024. With this, Germany wants to achieve its goal of having 15 million electric vehicles on the road by 2030.
According to the German Federal Agency for Economic Affairs and Export Control (BAFA), around 3760,000 applications for electric vehicles, with a total of €2.4 billion disbursed. Compared to 2022, there has been a decrease in the number of applications.
The abrupt end of Germany's electric vehicle subsidy program has dealt a blow to an already struggling auto industry, with strong opposition from all parties involved.
This was harshly criticized by the German Automotive Industry Association (ZDK). Its chairman, Josevig, said that for tens of thousands of customers who have already booked cars based on the subsidy amount, this is an incredibly serious breach of trust.
German automotive expert Ferdinand Dudenh FFER told the Rheinische Post that the move would seriously damage the competitiveness of German automakers. If the subsidy program is eliminated early, it will be a blow to local EV producers in Germany, with estimates that the number of new EV registrations will be reduced by 90,000-200,000 units next year.
Citi analysts, led by Harald Hendrikse, said in a report that the EU is unlikely to meet its 2030 EV target if it does not improve its industrial policy and automakers fail to launch cheaper EVs soon.
Tesla, Stellantis, Audi, Volkswagen, Mercedes-Benz and Kia have all said they will subsidize German EV buyers at their own expense.
Tesla posted on its official X account that it will compensate the Model 3 and Model Y electric vehicles that have been terminated by Germany**, and the subsidies will be provided to vehicles delivered before December 31 from December 18. Tesla will bear the manufacturer's share of the 2,250 euro subsidy for electric vehicles.
Stellantis said on Dec. 18 that it will provide a full subsidy by Dec. 31 and will partially subsidize vehicles registered before Feb. 29, 2024.
On December 19, Volkswagen said it would provide a full subsidy of 6,750 euros to private car buyers in Germany who order eligible all-electric ID series cars by December 15. In addition, users who purchase a car between January 1 and March 31 will receive a subsidy of 4,500 euros.
Audi said it will provide a full subsidy for cars ordered by Dec. 16 and delivered by the end of the year.
Mercedes said it will provide a full subsidy for orders delivered and registered between December 18 and 31, and will provide a subsidy for the manufacturer portion from January 2024.
Kia will provide a full subsidy to private car buyers who purchase the Niro EV, EV6, EV6 GT or e-soul until March 31, 2024.
French subsidies have changed tactics and increased carbon requirements
As early as June 14, 2022, the United Kingdom announced the cancellation of the £1,500 subsidy for plug-in hybrid electric vehicles, which means that the electric vehicle subsidy program that began in 2011 in the United Kingdom officially ended. In November 2022, Sweden** also announced that it would no longer offer incentives for the purchase of electric vehicles.
On December 14, France** announced a list of compliant electric vehicles with revised subsidy policies. According to the new French regulations, from December 15, France will sell prices below 4A tax rebate subsidy of up to €7,000 is provided for 70,000 euros of electric vehicles, with the aim of promoting local production of zero-emission vehicles and components.
France's latest EV subsidy policy introduces a new "carbon footprint" scoring scale. According to the French car ** "Roole", the adjusted measures will score vehicles according to the carbon footprint of the above stages: the production of materials such as steel and aluminum used to make or assemble cars, the production, intermediate processing and assembly of batteries, and transportation from the assembly site to the sales location in France. An electric vehicle must achieve at least 60 points to be eligible for the subsidy.
French Finance Minister Le Maire said in a statement that "we will no longer subsidize the production of cars that emit too much carbon dioxide".
France** will be scored based on a number of indicators, with the longer a product travels from France, the lower the score. This is obviously very disadvantageous for Chinese automakers who use a lot of coal-fired power generation and sell electric vehicles as vehicle imports. The new French rules effectively shut out non-European-made electric vehicles.
As can be seen from the new list, the models eligible for the subsidy include Tesla's Model Y produced in Germany, as well as electric models from Mercedes-Benz, BMW, Stellantis, Renault, etc. The Renault Dacia Spring, Tesla Model 3 and SAIC MG 4, which are produced in China and exported to France, will no longer be eligible for subsidies. At the same time, the American-made Tesla Model 3 is not on the subsidy list.
According to consulting firm PTOLEMUS Consulting Group, between 2015 and 2022, the number of electric vehicles in China increased from 670,000 euros to 320,000 euros. However, the number of electric vehicles produced in Europe is 17%, from just under 4€90,000** to more than €550,000 euros, which is beyond the reach of many ordinary Europeans.
According to research by Jato Dynamics, in the first half of 2023, the average retail price of an electric vehicle in Europe exceeded 65,000 euros, while in China it was just over 310,000 euros.
France** is currently spending 1.2 billion euros a year to subsidize electric vehicles, and in the absence of cheap European-made electric vehicles, one-third of the incentives will be used by consumers to buy Chinese-made electric vehicles, according to the French Ministry of Finance**. This trend has helped to spur a surge in imports and a widening competition gap with domestic producers.
French media "News Day FR" reported that on the surface, the new policy seems to benefit European manufacturers, but in fact they are also very worried about it, because most of these brands' electric vehicles use Chinese-made batteries, and if the new standard is implemented, there are almost no vehicles that can meet the standard and enjoy subsidies.
The Tribune, France's second-largest economy, said that the new standard will lead to a greater cost to consumers, because under this standard, the most environmentally friendly cars can only be made in France, and the car batteries used must be at least produced in Europe, if not in France, but in the context of inflation, manufacturers continue to increase prices, electric cars that meet these conditions will be very expensive.
Yonhap News Agency said on the 15th that only one Hyundai car in South Korea was on the list. In this case, the Ministry of Trade, Industry and Energy said it would file a complaint with France** for a re-evaluation of a Kia model that was not included in the list, the Niro.
Japan's Nikkei Asia newspaper said France's new regulations exclude some Asian-made electric vehicles, while Italy is considering similar measures, adding to Europe's protectionist tendencies towards EV production.
The adjustment of the subsidy policy can be said to be a first-class protection action in the name of environmental protection in France. Anything that does not meet the new subsidy rules is a foreign model, especially a Chinese tram. All those that meet the new subsidy regulations are French or European models.
The U.S. subsidy policy is biased in favor of domestic companies
France and Italy are not the "first to eat crabs" when it comes to adjusting subsidy policies in favor of domestic automakers.
The U.S. Inflation Reduction Act (IRA) has been implemented more thoroughly, with a total of 17 models in the list released in April this year receiving tax credits, but all of them are products of domestic American brands.
On December 1, local time, the United States** issued proposed new rules on tax deductions for electric vehicles. Under the new rules, starting in 2024, EV manufacturers will be eligible for a federal tax credit of up to $7,500 if at least 40 percent of the critical minerals needed for batteries come from the U.S. or North American free ** partners. By 2027, this will rise to 80%.
In addition, starting in 2024, EVs that contain batteries containing minerals and materials from State Entities of Concern (FEOC) will not be eligible for the federal EV tax credit. By 2025, the regulation will also be extended to critical minerals such as lithium, cobalt and nickel needed in battery manufacturing.
According to the FEOC Interpretation Bylaws issued by the U.S. Department of Energy, the FEOC includes entities that are "owned, controlled, governed by, or managed" by China, Russia, North Korea, and Iran**. The U.S. Department of Energy defines "jurisdiction" as an entity that is incorporated in one of these countries, or has its principal place of business in those countries, or conducts the extraction, processing, or processing of critical minerals in those countries.
The restrictions involving China are particularly stringent, as much of the mining, refining and component manufacturing required for the production of EV batteries currently takes place in China. Only some trace critical minerals are temporarily exempt from the new rules. According to the U.S. Treasury Department, these minerals account for less than 2 percent of the materials used in batteries.
In fact, while electric vehicle sales in the U.S. are growing, they are not growing as quickly as they used to be, and they are also slower than automakers expected.
Since the U.S. Congress passed the Inflation Reduction Act in 2022, the U.S. electric vehicle ** chain investment has set off a boom. However, the slow start of production and the slowdown in demand have caused American automakers, including Ford, General Motors and Tesla, to postpone their plans to build factories in the United States.
The New York Times reported that many of the restrictions previously imposed by the Inflation Reduction Act have made a large number of electric vehicles in the United States ineligible for tax credits. Currently, only about 20 out of every 100 electric vehicles sold in the U.S. meet the requirement to be assembled in North America. With the new FEOC rules coming into effect over the next two years, the range of vehicles eligible for the tax credit will be further narrowed.
Ford has revealed that its Mustang Mach-E will no longer be eligible for the $3,750 U.S. federal tax credit. Tesla also announced on its official website that some of the company's models sold in the United States may not be eligible for the $7,500 tax credit in 2024.
According to industry statistics, only about 20 existing electric vehicle models in the United States will be eligible for the federal electric vehicle tax credit next year, which greatly limits consumers' enthusiasm for buying next year and may cause weak electric vehicle sales in the short term.
Weak market demand has also made it difficult for many international automakers to promote electrification. According to the Wall Street ** in the United States, many international car companies have laid out new energy vehicle business, but now they have lowered their new production capacity targets.
Eli Hinckley, a partner at Baker Bots in the US, said: "If you want to procure all the components of an electric vehicle without any China-related involvement, it simply doesn't work and could make the current electric vehicle product more expensive." ”
The United States has adopted a closed policy for the popularization of electric vehicles, except for China, and even some Japanese and European Union cars are not allowed to receive subsidies, and advanced new energy vehicle technology cannot be popularized, which will eventually affect the speed of energy transition in the United States.
He Yadong, spokesman for the Ministry of Commerce, recently responded that China's electric vehicles and related products are widely popular in the global market, and the United States issued the implementation rules of the "Inflation Reduction Act" electric vehicle subsidy policy, discriminating against Chinese companies and excluding Chinese companies' products from the scope of subsidies, which is a typical non-market-oriented policy and practice. The above-mentioned discriminatory subsidy policy of the US side violates the basic principles of the WTO, seriously disrupts international investment, and undermines the stability of global industrial and industrial chains.