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Retreating from EVs: Risks for Western Carmakers

by Victoria Sterling -Business Editor

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The Petrol Pendulum: Why Governments Are Reconsidering the EV Transition

The Backtrack Begins: A Global ‌Trend

A quiet but significant ​shift ‌is underway ⁣in energy policy. Across ⁣the globe, governments that previously championed a rapid ‌transition to‌ electric ⁤vehicles (EVs) are now signaling a willingness to slow down, or even ‍partially reverse course, by easing restrictions on⁤ petrol and ‍diesel vehicles. ⁢this isn’t a wholesale abandonment of EV goals, but a​ pragmatic recalibration driven⁢ by economic ⁢realities, infrastructure limitations, and growing public concerns.

Graph showing ​slowing EV sales growth
Global EV sales growth is⁤ decelerating,‌ prompting policy reassessment. source: International Energy Agency ⁢(IEA).

Why the U-Turn? A Convergence of Factors

Several key ⁢factors ‍are converging to force this policy reconsideration. The⁢ most prominent is the cost of EVs. While prices are falling, they‌ remain significantly higher than comparable⁤ petrol vehicles, ⁢especially for average consumers. According to a recent report​ by⁤ BloombergNEF, the average EV price in 2023 was still ⁢approximately 35% higher ‍than a comparable ICE vehicle.This price gap is⁢ exacerbated by rising interest ‍rates, making financing more expensive.

Secondly, infrastructure‍ limitations are proving more challenging to⁣ overcome than initially anticipated. The rollout ⁤of public charging stations is lagging ⁢behind EV adoption rates ‌in ​many regions.​ The International Council on Clean Transportation (ICCT) estimates that the United States needs over 1.2⁤ million ‍public chargers by 2030 to support a fully electric fleet,⁣ but current deployment is far below that target. This range anxiety remains a significant deterrent for ⁤potential⁢ EV buyers.

political pressures ‌are playing a role. ⁤Concerns about the economic impact of ⁤the transition ‌on the automotive ​industry and related jobs, particularly in ‌regions heavily‌ reliant on ICE vehicle⁣ manufacturing, have⁢ led to pushback ⁣from unions and some political factions. ‍The United⁣ Kingdom’s⁤ decision to delay ⁢the‍ ban on new ⁤petrol and diesel car sales to 2035, from a previous target of 2030, was directly ⁤influenced by​ these concerns.

specific ‌Examples: Policy Shifts in Key Markets

The policy shifts are​ manifesting in different ways across various countries:

  • United Kingdom: ⁤Prime Minister Rishi⁣ Sunak delayed the ⁤ban on new petrol and diesel car sales to 2035, citing​ concerns about affordability and⁢ consumer choice.
  • United states ‌(California): While⁢ California still aims for ‍100% new EV sales by⁢ 2035, the ⁢state is facing legal challenges and is considering flexibility in its regulations.
  • Canada: The⁤ Canadian government has adjusted its EV purchase incentive program, reducing the maximum rebate amount‌ and focusing on lower-priced models.
  • European Union: The EU is⁣ debating revisions⁣ to​ its Euro‍ 7 emission standards, perhaps⁣ easing requirements for‍ ICE vehicles to provide⁢ manufacturers with more ​time to adapt.
Country Original ⁤EV Target Revised Policy
United Kingdom 2030​ ban‍ on new ICE vehicles 2035 ban ‍on new ICE vehicles
California 100% new EV sales‍ by 2035 Considering regulatory flexibility
Canada 100% new EV sales by 2035 Adjust

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