Is The Electric Vehicle Bubble Bursting? EV Sales Slow Globally
Key takeaways
- Tesla has cut prices on several of its models in the U.S. and China
- EV inventory at car dealerships is double that of a gas vehicle at the moment
- Consumer squeeze on spending could further harm EV sales — and stock prices
With price slash after price slash announced by car companies on EVs, it’s not hard to see there’s an issue with inventory in the EV world right now. But what exactly is happening, and why are EV sales falling if governments like the U.S. and China push the transition to cleaner vehicles? Here’s the lowdown.
If you want to turn the tide on climate change and your financial future, look no further than Q.ai’s Clean Tech Kit, which helps you invest in renewable energy, electric vehicles, and other environmentally sound options. A nifty AI algorithm continuously evaluates the asset mix, helping steer your portfolio toward a sustainable and profitable horizon.
Download Q.ai today for access to AI-powered investment strategies.
Are EV sales slowing?
High inflation and embattled consumer spending has battered EV sales across the world. Tesla, the world’s biggest EV maker, recently cut the prices of its Model S sedan and Model X sports car by around $10,000 as the company looks to attract new customers. The starting price of the Model S is now 25% cheaper, while the Model X has plunged 27% since the start of the year.
The price slashes have also happened in other countries. Tesla confirmed earlier this month that it was cutting the cost of two versions of the Model Y crossover by around $2,000 each, with the Model 3 having a limited-time insurance subsidy of around $1,100 until September.
Around 400 EV companies in China have gone bust in the last few years as industry subsidies tapered out and production mandates increased. The sluggish economy there has stalled new car sales, with GM Chevrolet dealers in China discounting EVs by 25% and Volkswagen’s joint venture in China announcing up to $8,200 in incentives for its ID.6 X model.
What’s the impact?
Car dealers are now said to be turning away EVs as inventory piles up; this summer, while overall vehicle inventory was at 54 days’ worth, EVs at dealerships are around double that.
And even though Tesla recorded record sales in its latest quarter, overall sales are slowing as EVs move beyond the early adopters and have failed to crack the mainstream. That and prices are just too high — the average car is now $10,000 higher than before the pandemic, and higher interest rates on loans have squeezed consumers.
This could soon start to impact the share prices. Advance Auto Parts, a vehicle parts provider, missed on Earnings and operating income in its latest quarter, which could serve as a warning bell for the wider EV industry.
The bottom line
The slowdown in EV sales has definitely hit, with a few factors like early adopters petering out and a squeeze on household budgets impacting sales globally. It could be a tough few quarters for EV makers, some of which have already sounded the alarm on their ability to continue trading.
Dive into a cleaner, greener investment pool with Q.ai’s Clean Tech Kit. As an investor, you’ll get to support the sectors that matter most to you, like renewable energy and sustainable technology. Our AI acts as the lifeguard, always on the lookout and ready to adjust your asset mix to help achieve maximum impact and returns.
Download Q.ai today for access to AI-powered investment strategies.
