Sales for new electric vehicles (EV) in China fell from July to October by 28 percent compared to the same period the year before, after the Chinese government cut subsidies for purchases.
China is the world’s largest car market, and it wants to have 25 percent of new car purchases to be EV by 2025.
Today, EVs currently account for approximately 5 percent of the whole market.
Instead of subsidizing EV purchases, Beijing will invest instead in EV infrastructure, such as charging stations.
TRENDPOST: The large subsidies required for the research and development of EVs reveal that companies will need to be propped up by the government until the technology catches up to affordability.
It’s not just car manufacturers cashing in on subsidies, but also fossil fuel corporations.
A recent study by the International Monetary Fund showed that in 2017, $5.2 trillion was spent globally on subsidies for fossil fuels, equivalent to more than 6.5 percent of global GDP. China spent that year $1.4 trillion, the U.S. spent $649 trillion, and Russia financed $551 billion.
The auto industry has difficulty mastering standard features, too.
Takata Corp., which produces airbags for cars, caused the recent recall of 1.4 million cars, including BMW AG, Toyota, Honda, Mitsubishi, and Volkswagen.
Previous malfunctions of the Takata airbags have been connected to 22 deaths and 180 injuries worldwide, forcing the company into bankruptcy and causing car companies to reserve billions for settlement claims.
TRENDPOST: The world auto market is doing worse than during the Panic of ’08, selling four million fewer vehicles than in 2018.
The Association of the Automotive Industry (VDA) predicts further job losses within the next year. China in particular will be hit hard.
The Center for Automotive Research forecast that the car market will not rebound from its peak in 2017 until 2024. While we agree that the car market will not rebound from its peak in 2017, considering the onset of the “Greatest Depression,” which we forecast will begin in 2021, the auto sales rebound will come much later than 2024.
