If you’re trying to get a new technology off the ground, it’s generally not a good sign that people have to be subsidized to use it. From Mike Shedlock at mishtalk.com:
Sales in Germany plunge after subsidies were reduced.
The Wall Street Journal reports Germans Think Twice About Electric Vehicles
Sales of fully electric vehicles (EVs) fell 13.2% in January compared to January 2022, Germany’s Motor Transport Authority reports. Sales of hybrids declined 6.2%. This compares to an increase of 3.5% in the number of new gasoline-powered cars sold, and a modest decline of 1.2% for diesel.
The main explanation is the end of Berlin’s subsidies for EVs and hybrids at the new year. Until December the subsidy had offered up to €9,000 split between consumer and producer for EVs with a net list price below €40,000. Hybrids in that price range received €6,750. Berlin has ditched the subsidy for hybrids entirely, and cut the payout to €4,500 for EVs below €40,000.
This year will thus be a market test for electric vehicle demand in the Vatican of climate-change belief. Politicians in the West have used subsidies and mandates to drive EV sales, no matter that they aren’t as green as their advertising. The cars are only as carbon-friendly to operate as the power grids they refuel from, and Berlin’s refusal to embrace nuclear power means Germany is burning more coal to cover for the end of natural-gas imports from Russia. Then there’s the environmental cost of mining for all that cobalt, copper and lithium for EVs and their batteries.
If consumers want to buy EVs, go for it. But what does it say about their appeal if people need subsidies to buy them?