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Automotive Industry
Car buyers worldwide are returning to combustion engines as a result of policy reversals, trade wars and growing skepticism about EV infrastructure and costs, a report by professional services group EY showed on Tuesday.
In a push to ease sales of gasoline-powered cars, U.S. President Donald Trump last week proposed slashing fuel economy standards finalised by his predecessor, while the European Union might soon unveil a watered-down version of its 2035 combustion engine phase-out.
EY Global Aerospace, Defense and Mobility Practice Leader Constantin M. Gall said policy changes follow a slower-than-expected EV transition.
He said Chinese buyers, despite buying more EVs, are less interested in how their cars are powered, and more in their digital lifestyle integration.
Why it's important
While carmakers encourage a slower phase-down of fossil fuels as a lifeline to the industry, electric transport groups argue a swift EV transition is necessary to curb CO2 emissions.
Western policymakers have imposed measures such as import tariffs to protect their markets from the threat of China's heavily subsidized EVs, but U.S. and European carmakers also face competition from China's gasoline-powered vehicles in global markets.
By the numbers
Half of global car buyers plan to buy a new or second-hand combustion engine car in the next 24 months, up 13 percentage points from 2024, according to the EY report.
Preference for battery-electric and hybrid cars has dropped by 10 and 5 percentage points to 14% and 16%, respectively.
Among prospective EV buyers, 36% are reconsidering or delaying purchases due to geopolitical developments, EY said.
Key quote
"We had discussions with the European Union, as they are doing the due diligence now for their reassessment of the Green Deal... they are now looking more at scientific facts, less at convictions," said Gall.