Sales of electric vehicles have been on a steady upward trajectory in recent years, but the slowdown in sales that occurred in January is troubling news for the auto industry.
The global electric vehicle market is recovering from one of the most dramatic collapses in monthly sales. Research by Rystad Energy showed that only 672,000 electric vehicles were sold in January, about half of the sales achieved in December 2022, and only a three percent increase compared to January 2022. At the same time, the market share of electric vehicles among all private cars sold fell to 14% in January, which is significantly lower than the 23% recorded in December.
Tax breaks and government subsidies have helped the electric vehicle market grow, as countries see fleet electrification as a fundamental tactic to achieve zero-emissions goals. The reduction or elimination of these subsidies in many countries at the beginning of the year had a negative impact on consumer sentiment. Now it's up to automakers to reverse the downward trajectory and save sales in 2023.
Subsidies for electric vehicles were reduced in many European countries and mainland China at the beginning of the year, and a return is unlikely in the future. The only glimmer of hope for manufacturers is the US market, which is just at the beginning of its journey of electrification and the introduction of tax incentives. The USA is the only major market where sales of electric vehicles increased in January.
China, which is the largest global market for electric vehicles, saw sales of electric vehicles drop by nearly 50% in January 2023 compared to the previous month. The situation is not so great in Europe either, although during February there was a marginal increase in sales compared to the previous year.
The American company Tesla was the first to understand these changes in the market, so it decided to grant customers big discounts for its vehicles, HAK Review reports. Not long after that, some other manufacturers such as Ford reacted and reduced prices, while others, among which Volkswagen and Renault stand out, categorically refused to offer their electric vehicles to customers at a lower price.