World sales of electric vehicles stall
EVs are moving in better numbers only in those places where they are heavily subsidized
It wasn’t a banner year for electric vehicles in 2019. After a six-year run typified by near exponential growth — EVs averaged an incredible 60 per cent year-over-year increase from 2012 to 2018 — worldwide sales of plug-in vehicles have stagnated. The predictions that foresee electrification supplanting internal combustion by 2040 — or even 2030 — have all been predicated on sales maintaining that phenomenal growth. Every year, year after year.
Indeed, on a worldwide basis, EV sales seem to have levelled off. According to
Automotive World, 2.259 million new BEVs (battery electric vehicles) and PHEVs (plug-in hybrid electric vehicles) were registered last year. That’s roughly 2.5 per cent of the 90 million-plus vehicles sold last year.
There have been pockets of continued growth. Europe has continued to be a hotbed of electrification. Norway, the poster country for electric vehicle adoption, still shines. But China and the United States, the two largest automotive markets in the world, actually recorded decreases in plug-in sales. Sales of BEVs were down four per cent in China and a whopping nine per cent in the U.S.
As for why, it’s simply a case of following the money. In the United States, the major factor was the lower price of gas, while the long-promised reduction in electric vehicle prices is still a pipe dream.
China is looking to hydrogen fuel cell-powered vehicles. So, in June of last year, the subsidies for EV purchases were cut in half. And as for the smokescreen in the never-ending why-aren’t-EVsmore-popular debate — a lack of a charging infrastructure to support electric vehicle owners — China’s decrease puts paid to that notion. It has half a million charging points, more than enough to support its four million or so EVs. Subsidy, in fact, trumps infrastructure.
In Norway last year, EVs accounted for a whopping 56 per cent of the new vehicles sold in the Scandinavian petroleum producer. Plug-in proponents like to ascribe this popularity to its comprehensive charging network and Norwegian concern for the environment. But what’s really fuelling the revolution is the most generous incentives in the world.
Norway’s various taxes — sales, road and fuel — have long been onerous. According to Green Car Reports, taxes amounting 63 per cent — yes, US$13,510 — are added to the on-the-road cost of a US$21,500 Volkswagen Golf. An e-Golf, meanwhile, is completely exempt from those same taxes. Do the math and the plug-in version of German compact is roughly US$4,500 cheaper than the gas-powered version.
For comparison, a Kia Soul EV retails for $42,595 in Canada, while the base gas-powered version costs $21,195. Even with the most generous subsidies, the price premium is still substantial. Go through the entire list of electric vehicles sold in Canada and none are price competitive with their gas-fuelled twins — or nearest equivalent — with or without subsidies.
Compared with the U.S., Canada is still EV friendly, our BEV and PHEV market growing some 26 per cent in 2019. That growth, however, is extremely localized and seemingly based solely on government largesse. In British Columbia and Quebec, whose local governments ladle on their own incentives on top of the federal $5,000 subsidy, EV sales are booming. In Ontario, which famously ended its incentives in 2018, sales have dropped precipitously. Indeed, it appears the federal incentive alone is too little to have significant effect.
Now, except for Norway — where the country’s subsidization is paid for by its huge oil wealth fund — no country can afford to maintain these outlays until battery-powered vehicles become affordable, if in fact they ever do. So, if we are to transform our fleets to electrification, we’re going to need a longer-term plan.
The first step might be the end of this internecine fight between electrification protagonists. Fuel cells are not “fool’s cells” as long as they reduce tailpipe emissions. Plug-in hybrids are not lesser just because they only reduce CO2 emissions by 50 or so per cent. Infighting doesn’t work any better in a technological revolution than it does in political circles. The goal is the reduction of greenhouse gases. How we get there doesn’t matter.
Incentives cannot and will not last forever. If a five per cent bump in sales is all we can manage, imagine what will happen when they’re not around. We need a better solution.