For the first time since Tesla sold its first plug-in electric vehicle (EV) in 2008, worldwide sales of EVs fell in July. Compared with July of last year, sales declined by 128,000 units.
The largest part of that decline was due to lowered subsidies for EV buyers in China. Beginning on June 26, China reduced its subsidy on EVs and, according to the monthly report from the China Association of Automobile Manufacturers (CAAM), production of new electric vehicles declined by 84,000 units year over year in July while sales declined by 80,000 units.
Researchers at Sanford C. Bernstein reported Tuesday that the market for electric vehicles grew by 35% year over year in the first seven months of 2019 and projected that full-year sales will rise by 23% to 48% in 2019 to a total of 2.4 to 2.9 million vehicles. The data was cited in a report at Bloomberg.
The Chinese government cut its subsidy in half for EVs with a range of at least 250 miles, from around $7,500 to around $3,700 per vehicle. To qualify for any subsidy at all, an EV must have a range of more than 150 miles, up from around 95 before the change. Direct incentives from local governments were eliminated entirely. Taken together, the reduction amounted to 67% of total government subsidy payments. All subsidies are expected to end next year.
Bloomberg cited the Bernstein report: “Unsurprisingly the growth momentum halted in July amid subsidy cuts. Despite expected short-term weakness in 2H19, we continue to be positive on long-term EV demand.”
For the month of July, the EV sales leader was Tesla with total sales of 20,000 units, according to Bernstein’s researchers. Chinese EV maker BYD sold 16,000 units, while BMW sold 9,000 and Beijing Automotive Industry Holding (BAIC) sold 8,000 units.