The Next Wave Of EV Credits

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Just as the US government is eliminating EV tax credits, the EU appears ready to add them. EU leaders calculate what could eventually be overwhelming competition from highly successful China EV manufacturers needs to be blunted. They want credits in place in an attempt for legacy car companies to hold their own

According to Semafor, “The European Union plans to create bloc-wide electric vehicle subsidies to boost its embattled car industry and compete with China.” Among the reasons is that Chinese EV companies have backing from their government which means they can absorb potential losses created by low sticker prices.

*The EV Race

*Model 3 Most Popular

*EV Sales At 1.3 Million

Ironically, EV sales have done fairly well without the credits. Ten percent of cars sold in the US are EVs. (Although that figure is higher than other estimates). The figure in France is 25%. In the UK, it is 24%, and 12% in Spain.

What the EU fears is that the rising EV sales in the region will be captured by Chinese companies. Troubled companies like VW will be elbowed out. VW has lost hundreds of millions of dollars in its attempts to move into the EV sector.

China EV Prices

EU officials have put tariffs on Chinese EVs which are as high as 45%. EU manufacturers are afraid of a trade war, the effects of which are not certain. Rather, they are trying to lower the prices of their own EVs and take advantage of the new EU-wide credit.

Chinese EVs are currently blocked from the EU and US. Once those blocks disappear, there will be no where for legacy car companies to hide