Electric car sales are dropping for the first time on record — and China's subsidy cut may be to blame

The Chinese government's decision to cut the subsidy for electric cars has caused sales to drop for the first time in history.

Monthly sales worldwide fell by 14% to around 128,000 plug-in cars, according to Bloomberg.

Sales have declined primarily in China and North America, while Europe has seen an increase.

Despite this, analysts are convinced that the demand for electric cars will increase again in the long term.

The Chinese government's decision to reduce state subsidies for electric cars and other vehicles with alternative driving systems is having its first consequences: In July, global electric car sales fell for the first time in history.

Monthly sales worldwide fell by 14% to around 128,000 plug-in cars, according to a report cited in Bloomberg.

Sales have declined primarily in China and North America, while Europe has seen an increase.

Although China is the largest market and producer of electric cars, the government reduced subsidies for new purchases of electric cars on June 26.

This measure was designed to encourage automakers to focus on product innovation. However, China's slowing economy may also have reduced willingness to buy e-cars, according to Bloomberg.

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Although electric cars are still in a niche market, the declining demand for gas-guzzlers shows that the future of mobility lies in alternative fuels.

According to Bloomberg, 35% more e-cars were sold globally in the first seven months of the year. The full-year forecast for 2019 is estimated at 2.9 million newly registered e-cars.

“Unsurprisingly, the growth momentum halted in July amid subsidy cuts. Despite expected short-term weakness in 2H19, we continue to be positive on long-term EV demand,” a Bernstein analyst was quoted as saying.