Concerns Arise with the Disappearance of Tax Support
As the tax credit provisions in Trump's Grand Act are set to expire at the end of September, the future of the U.S. electric vehicle industry is under a cloud. Many market analysts suggest that car companies like Tesla, General Motors, and Ford may face a cliff-like drop in sales in the short term, and the overall market share of the industry could even be halved.
Currently, the market share of electric cars in the U.S. is close to 10%, but some experts predict that the proportion could fall back to less than 4% once the incentive policy expires. For car companies in the expansion stage, this is undoubtedly a heavy blow.
Short-term Sales May Surge, Long-term Risks More Prominent
During the final "window period" of the tax credit policy, consumers are hastening to place orders to secure discounts. Data shows that in August, electric vehicle sales increased by 20% year-over-year, with some brands setting record highs. Industry insiders believe that third-quarter sales may remain strong, but they will decline sharply starting in the fourth quarter.
Research institutions point out that once centralized order deliveries are complete, inventory pressure on electric cars will become apparent. Without subsidy support, price-sensitive consumers may opt for gasoline cars, and market demand will drop sharply.
Corporate Response Strategies: Price and Promotions
With subsidies gradually disappearing, car companies may have to stimulate demand through direct price cuts or additional discounts. The industry recalls that a few years ago, when General Motors’ electric models no longer enjoyed the $7,500 tax credit, the company had to cut prices by the same amount to maintain sales.
Currently, some manufacturers have announced that they will offer cash discounts after the subsidies expire, attempting to mitigate the impact. However, this also means profit margins will be further compressed, and the overall profitability of the industry will face greater challenges.
Opportunities for Foreign Car Companies and Leasing Models
It is worth noting that current regulations provide special exemptions for leasing electric cars: consumers can enjoy tax credits regardless of origin or price. This allows non-American car companies like Hyundai, BMW, and Kia to potentially benefit in the leasing market, indirectly enhancing competitiveness.
This could also lead to subtle changes in the market landscape: American domestic car companies might face pressure in the retail segment, while foreign brands accelerate their penetration through leasing channels.
Policy Mix May Weaken Industry Drive
In addition to the impending expiration of tax credits, the U.S. government also plans to adjust a series of policies related to new energy vehicles, including reducing production incentives and relaxing emissions constraints. This means that in the future, car companies will lack both "rewards" in electric vehicle production and have lost "penalties," significantly weakening their drive.
Industry experts point out that without dual policy incentives, companies' enthusiasm for transformation may decline, and in the long run, it is not conducive to the continuous increase in the penetration rate of electric vehicles.
Industry Facing Turning Point
In the global wave of new energy transformation, the U.S. electric vehicle industry has already made some breakthroughs, but the withdrawal of subsidy policies could be a test of "hard landing." Market participants generally believe that the coming quarters will be key periods to assess car companies' ability to withstand pressure and market resilience.
If consumer confidence cannot quickly recover, the electric vehicle market may face years of slow growth. Car companies need to find new paths in cost reduction, technological innovation, and differentiated competition, or they may lose the market share they have already established.
