EV Market Stands Firm Through Subsidy Cuts in Europe

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While incentives for electric vehicle (EV) purchases have been cut or withdrawn in some European countries, this is not halting the growth rate for EV sales in affluent car markets — at least not to the extent some may have expected. This is mainly because battery costs have fallen and these markets have attained some critical mass, often with EV sales accounting for double-digit percentages of new car sales. Another reason is that some governments have reduced or withdrawn purchase incentives, which are viewed as soft "carrots," leaving stronger "sticks" to influence demand. More members are implementing phaseout plans for sales of internal combustion engine vehicles and, at the EU level, tailpipe emission standards for manufacturers are getting tougher. In the UK for example, where the EV penetration rate was close to 12% of new light vehicle sales last year, multiple cuts to purchase incentives have not had a meaningful impact on uptake as sales continue to grow. Additionally, while the number of EU countries that offer zero purchase incentives has grown slightly and this will certainly be a growing pain, the overall picture is still one of healthy EV sales growth.

Electric Vehicles, Low-Carbon Policy, Coal
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