3 days ago
Volt face
Grim results of EV makers raise a question about viability
The future of mobility is electric, and it should have been here by now, considering that Morris & Salom's Electrobat cars were running on Philadelphia's streets in 1894. In 1909, an electric car beat a gasoline car in Boston's busy traffic by 15 minutes. But electric cars are still at the 25% sales mark globally, and like most averages that figure is misleading.
When 70% of all electric cars are made in China, and 65% are sold there, the picture looks distinctly ICE-y – short for internal combustion engine – for the rest of the world. Then consider market leader Tesla's woes. Its quarterly revenue has slumped. Half-yearly sales in Europe are down 33%. But more worrying for it is the drying carbon credits market under Trump. So far, Tesla's made billions selling these credits to makers of ICE cars. It earned $2.1bn from them in just the first nine months of 2024. Tesla also has to worry about the phase-out of the $7,500 tax credit for EV buyers in Sept.
Carbon and tax credits are nothing but subsidies for the EV business in US and Europe, and the Chinese EV miracle was also built on subsidies. By some accounts, China spent $231bn over a decade to prop up the industry, which now has spare capacity of 3mn cars, leading to cut-throat competition at home and dumping outside. That raises an important question. If EVs have truly come of age, why do they need state support? In 1900, US had only 8,000 cars. By 1915, there were over 2mn. Henry Ford's Model T – launched for $850 in 1908 and priced at just $300 in 1917, thanks to economies of scale – brought the horseless revolution without any state help. It's time electric cars learnt to stand on their own four wheels.
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This piece appeared as an editorial opinion in the print edition of The Times of India.
