Electric car boom in Europe: Impact from subsidies or new consumption trends?


   In European countries are buying electric cars at a record rate. But what has happened in China is a warning that this trend may not last.


   Government subsidies and an increasingly wide selection of vehicles are helping to boost European consumer demand for electric cars. But what happened in China is a warning that this trend may not last.


   Europeans are buying electric cars at a record rate, and thanks to that, the region has overtaken China to become the world's largest electric car market. Emboldened by government subsidies for electric car buyers and lured by the arrival of dozens of new electric car models on the market, many European consumers feel it's time to speak up. farewell to traditional internal combustion engine cars.


THE CURRENT OF ELECTRIC CAR DEMAND IN EUROPE


   Without subsidies, electric cars are significantly more expensive than comparable models powered by internal combustion engines. Experts say that at least until the end of the decade, when the price of electric car batteries will drop, thanks to factors such as new technology, larger production scale, and greater competition, the price of electric cars will can compete on price with traditional cars


   At first, the European approach to electric cars came with more "sticks" than "carrots". Over the years, the European Union (EU) has continuously tightened regulations on emissions, causing the auto industry to choose between producing more electric and hybrid cars, and facing heavy fines on the other. 


   As the Covid-19 pandemic hit, governments in the region had to find ways to revive their economies, and one measure of choice was to support industries on the front lines of the fight against climate change. climate change. A large part of that support came in the form of subsidies to consumers buying electric cars, creating a wave of electric vehicle demand in the region.


   2020 will see automakers continuously launch new electric car models for the European market. Volkswagen - the largest car manufacturer in the region - introduced two models ID.3 and ID.4. Luxury car brands such as BMW, Mercedes and Audi also launch high-end electric models. This year, Mercedes is expected to market the EQS model - an electric car that will succeed the premium S-Class.


   In total, about 65 new electric car models were launched in the European market last year, more than double the number in the Chinese market. This year, the number of new electric car models for Europe is expected to be 99, while the US market only had 15 models last year and 64 models are expected this year.


   Manufacturers say that a well-timed combination of stimulus measures and a large number of new electric vehicle models has fueled both demand and supply in the electric car market in Europe.


   The appearance of electric versions of familiar models is also a factor helping to boost electric car sales in Europe. Hallgeir Langeland, a 65-year-old Norwegian environmentalist, hasn't owned a car in 25 years. However, when Ford launched an all-electric version of the Mustang in 2020, he didn't hesitate to order one right away. When buying the car, Mr. Langeland received a subsidy under the policy of the Norwegian Government - a program that has made the country the largest electric car market in the world per capita.


A WARNING FROM THE OLD CHINESE STORY


   Christian Burg, owner of a company specializing in building energy-efficient homes in Germany, has been driving a BMW X3 for many years. Last summer, when the German government drastically increased subsidies for electric cars, he bought a new BMW iX3, which is a plug-in hybrid version of the X3. "I received a cash allowance of 3,750 euros," or $4,500, Burg said.


   In 2020, electric car sales in Europe increased by 137% to 1.4 million units, compared with a 12% increase to 1.3 million vehicles in China. In the United States, electric car sales last year increased 4% to 328,000 vehicles, according to data from research firm EV-Volumes.com.


   This strong growth of the European electric car market reminds many people of what happened in China a few years ago. Determined to stay ahead of Western countries in the field of electric vehicles, Beijing has strongly subsidized consumers to buy electric cars and required automakers to ensure a certain percentage of annual vehicle output is electric vehicles. electricity.


   That effort by Beijing has led to the birth of hundreds of electric car startups, and at the same time brought the market share of electric vehicles in the country's auto market to more than 8% by mid-2019. In June 2019, the Chinese government began to sharply cut subsidies, and electric vehicle sales immediately fell, to less than 5% of total car sales by the end of that year.


   As the Covid pandemic emerged, electric car sales in China continued to slide deeper, raising doubts about the country's ability toachieving the goal of electric cars accounting for 20% of total new car sales by 2025.


   In 2020, China resumed subsidies for electric cars, and then cut these subsidies again in January this year, in an effort to "cope" the electric vehicle industry's habit of waiting for subsidies, so that the industry can be free. grow on its own feet.

   European countries are considering a plan to gradually reduce the subsidy program for electric cars towards the end of this year.  Analysts say that governments in car-producing countries like Germany and France could extend subsidies beyond 2021.

   While they welcome subsidies for electric vehicles, automakers are also concerned that the measure This will only have short-term effects and will not be able to create an electric car market with sustainable growth without more structural changes.

   Car manufacturers call on governments in Europe, instead of subsidizing consumers to buy electric cars, should focus more on developing infrastructure for electric cars such as car charging stations, car support, etc. support the construction of car battery factories, and tax carbon dioxide emissions.