A❤️479-word🧡under💛3-minute💚read
I was struck this week by how much two major economies have diverged in EV adoption.
In the UK, which consistently demonstrates it’s the ability to execute its climate strategy, EV sales are on the upswing.
April data from NGO New Automotive showed that registrations of EVs increased 3.7% year-over-year. Even more encouraging is that EVs achieved a 20.4% market share in the month. Year-to-date EV registrations have increased 31% and the cumulative market share has reached 20.71%.
Meanwhile, in April, the Society of Motor Manufacturers and Traders reported that overall car registrations declined 10.4%, with gas and diesel autos dropping 22% and 26.2% respectively.
Then there’s the US, where April EV sales disappointed. According to Motor Intelligence, EV sales fell by about 5%. However, unlike the UK, the US saw overall sales increased 10% in the month. Since 2021 monthly EV sales in the US have only dropped three times.
No surprise Tesla took a major hit. Its sales declined 13%, but they weren’t alone. Niche player Rivian saw its sales slashed by half. Citing the impact of trade policies, the company has cut its outlook for the year by about 10%.
Why the market divergence?
For one thing fuel. Fuel is much more expensive in the UK than in the US. This makes the cost of operation for EVs more attractive in the UK. And the EV market share numbers in the UK were aided by the decline in overall sales.
New Automotive cited an April 1 tax increase for the decline, but the increase was minor. EV are subject to the same tax, but for the first registration year the tax is near zero.
Other factors are also at play. The UK is doing a better job of building out its charging network. And no surprise that policy is playing a role as government incentives continue to bolster EV adoption.
The climate in the US couldn’t be more opposite. Plans to build out a national charging network are on hold for at least another three years. Tesla, which has dominated the US market has become persona non grata. And undoubtedly, EV demand was pulled forward into Q1 over fears of losing the $7,500 federal tax credit.
EV adoption in the US – particularly in the form of a lease - has been spurred by incentives. The Wall Street Journal cited the ability to lease a $44,000 Hyundai EV for less than a $22,000 gas-powered Elantra. However, those incentives are disappearing.
The combination of lower fuel costs and inadequate public charging mutes interest in EVs by Americans. Not to mention the political bifurcation that has manifest with all things climate-related.
The divergence of the UK and US markets illustrates the importance of policy. However, it also illustrates the importance of two key purchasing drivers: overall value and charging availability.
#evs #electricvehicles #climatepolicy