Global electric-car sales fell for the first time in modern history in July after China scaled back purchase subsidies, highlighting the role government assistance is having on the burgeoning market.
Monthly sales worldwide fell 14% to about 128,000 plug-in passenger electric vehicles, Sanford C. Bernstein said in a report Tuesday. Sales declined in China and North America, while rising in Europe.
Growth in China, the biggest producer and market for electric vehicles, is slowing down as a reduction in EV subsidies and a cooling economy weigh on consumers’ buying decisions. China’s government scaled back funding for individual purchases of new-energy vehicles starting June 26 to encourage carmakers to focus on product innovation.
While electric vehicles account for just a few percent of the car market, automakers are betting on the segment for future growth. Slowing demand for gas guzzlers has plunged automobile markets worldwide into a decline, led by a historic drop in China.
For the first seven months of the year, the global electric-car market showed growth of 35%, Bernstein said. The researcher estimates that full-year sales will rise by 23% to 48% to 2.4 million to 2.9 million units in 2019.
“Unsurprisingly the growth momentum halted in July amid subsidy cuts,” Bernstein analysts said in the report. “Despite expected short-term weakness in 2H19, we continue to be positive on long-term EV demand.”
Tesla Inc. led the passenger EV market with sales of about 20,000 units in July, followed by BYD Co., the Chinese brand backed by Warren Buffett.