How the United States has been left behind in the global race on electric cars

You might be forgiven to think that electric cars could finally gain momentum in the United States.

After all, battery car sales exceeded 1.2 million last year, more than five times the number four years earlier. Hybrid sales jumped a factor of three.

The cars fueled by battery represented 10% of global sales in August – a new summit, according to S&P Global Mobility.

And in the updates of investors this week, General Motors, Ford, Tesla and other companies have all declared record electricity sales in the last three months.

This has marked a light point in an industry fighting with the benefits of still high interest rates and buyers forward on inflation, prices and the larger economy.

But analysts say that the boom was caused by a dashboard to buy before the end of a government subsidy which helped strike up to $ 7,500 (£ 5,588) on the price Some electric batteries, rechargeable hybrid or fuel cell.

With this tax credit disappeared at the end of September, car manufacturers expect the momentum to turn as a opposite.

“It will be a dynamic industry, but it will be smaller, much smaller than we thought,” the director general of Ford Jim Farley said on Tuesday during an event.

“I expect the request EV will fall fairly rush,” said General Motors’s financial director Paul Jacobson at a conference last month, adding that it would take time to see how fast the buyers would return.

Even with recent gains, the United States, the second largest automotive market in the world, has stood out as a delay in sales of electric cars compared to a large part of the rest of the world.

In the United Kingdom, for example, sales of electric cars and battery hybrids represented almost 30% of new sales last year, according to the International Energy Agency (AIE), while in Europe, they represented approximately one in five.

In China, the world’s largest automotive market, sales of these cars represented almost half of the overall sales last year, according to the IEA, and they should become the majority this year.

Adoption in some other countries, such as Norway and Nepal, is even greater.

Electric vehicles (VE) tend to explain a smaller part of sales in Latin America, Africa and other parts of Asia – but growth has been skyrocketed.

Analysts claim that adoption in the United States has been slowed down by relatively low government support for the sector, which has limited the types of grants, commercial programs and rules that have helped industry in places like China, the United Kingdom and Europe.

Former President Joe Biden has strongly increased the appeal, aiming So that electric cars do not represent half of all sales in the United States by 2030.

Its administration has strengthened the programs rules, stimulated demand thanks to purchasing government fleets, automotive manufacturers, driven from investing with loans and subsidies for EV investments, have spent billions of dollars to build charging stations and extended the $ 7,500 tax credit as a bid.

Supporters have thrown these efforts in part as a competitive imperative, warning that without these American car manufacturers risk losing against the competitors of China and other countries.

But President Donald Trump, who recently called climate change a “con” work, pushed many of these measures, including $ 7,500 credit, arguing that they were pushing people to buy cars that they would not want to otherwise.

“We say … You will not be forced to manufacture all these cars,” he said this summer, while signing a bill aimed at canceling California’s rules, which would have deleted sales of petrol cars only in the state by 2035. “You can do them, but it will be by the market, judged by the market.”

Electric cars have become more affordable in the United States in recent years – but they have always been more expensive than comparable petrol vehicles.

And the Chinese car manufacturers like Byd, who have made rapid breakthroughs on other markets thanks to low prices, were actually excluded from the United States, due to high prices targeting cars manufactured in China, supported by Biden and Trump.

In August, the average transaction price of an electric car in the United States was more than $ 57,000, according to the search firm in the automotive industry Kelley Blue Book, around 16% higher than the average for all cars.

The cheapest battery car offered, a Nissan Leaf, costs around $ 30,000 (£ 22,000). In comparison, several models can be found for less than £ 20,000 in the United Kingdom.

Analysts say what buyers are doing the next dependence on how manufacturers have set prices in the coming months, because they not only support the end of the tax credit, but also prices on foreign cars and certain automotive parts that Trump has introduced this spring.

Hyundai said this week that it would compensate for the loss of tax credit by reducing the price of its range of IONIQ electric vehicles. But Tesla said the cost of rental payments of some of its cars would increase.

Stephanie Brinley, associate director of S&P Global Mobility, said that she did not expect many companies to follow the example of Hyundai, given the prices.

Although some buyers can opt for electric vehicles anyway ”

“It would have been quite difficult if everything you had to face, these are new prices, but with new prices and the incentive by disappearing, there are two impacts.”

Car manufacturers had already reduced their investments in electric cars.

Researchers say that Trump’s policy changes could further reduce these investments.

“This is a great success for the electric vehicle industry – there is no point on tiptoe,” Katherine Yusko said, research analyst at the American Security Project

“The subsidies were initially a means of leveling the rules of the game and now that it left, the United States has a lot of ground to catch up.”

However, Ms. Brinley said she was hesitating to declare the United States in an industry that still tests technological alternatives.

“Is it (electric) really the right thing?” She said. “To say that we are behind it is the only one and the best solution and I think it is a little early to say.”