US electric car sales are on the rise, but decline in China could provide the impetus for lower prices. The recent increase in tariffs on China and the retaliatory measures could further reduce the demand for electric cars .Electric car sales more than doubled in 2018, largely following the introduction of the Tesla Model 3. This is the lowest end car provide by car maker Telsa, which has enticed a new group of consumers into the electric car market. Sales of other electric cars have remained slow, while some popular models such as the Chevrolet Bolt EV have tumbled.
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New Cars Trying to Compete With Tesla
New cars are attempting to make their way into the market. Electric cars such as the Jaguar I-Pace and Audi E-tron quattro, are now being imported into the US. New electric cards from Hyundai and Kia, including the Hyundai Kona Electric and Kia Niro EV and Soul EV have arrived in the US but only in very small numbers. Volkswagen is planning to step up their deliver of electric vehicles to the US. The company is planning to build 22 million new electric cars in 70 new electric models by the end of the next decade. The first, the VW ID 3 hatchback, has now been delayed until early 2020. BMW plans 13 new electric cars by 2023 as well as 12 new plug-in hybrids. Similarly Daimler has plans for 10 new electric cars by 2022.
Some Supply Concerns
Car makers are starting to show some concerns about supplies of raw materials for batteries, and the lithium industry is worried about a short-term oversupply, other battery materials such as ethically-sourced cobalt or magnesium, nickel or other materials could be contributing to supply concerns.
Growth in China is Slowing
While US electric vehicle growth is on the rise growth in electric-car sales has plunged in China after the country cut incentives for purchasing EVs and instituted new measures to restrict the number of companies building them. The market for EVs in China grew by 90 percent in the first quarter of 2019, versus the same quarter in 2018. But growth has since slowed to about half that rate.
Trump Adds to Uncertainty
President Trump added uncertainty the capital markets. On Thursday August 1, President Trump tweeted that he was planning to add more tariffs on China up to 10% on another 300-billion worth of imports. The President is frustrated with the timing of the deal with the Chinese. They moving very slowly and are looking to negotiate with the next President if possible. President Trump made a campaign promise that he would win a trade war with the Chinese, but so far all he has accomplished is reducing global GDP. While Trump hammers away at the Fed for rates moving higher, he is undermining global growth with new tariffs that are effecting electric car sales from the second largest consumer around the globe.