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Expand chart
Reproduced from IEA; Note: Government incentives includes direct spending and tax expenditures; Chart: Axios Visuals

A new International Energy Agency analysis finds that governments account for nearly one-fifth of global spending on electric vehicle purchases.

Why it matters: "The ability of governments to stabilize and then reduce their share of total EV spending will be a key test of the sustainability of the EV market in coming years," 2 analysts write in the Oct. 10 commentary.

  • "Unless government incentives adjust as the market increases, considerable pressure will be placed on public budgets," they add.

The big picture: Governments accounted for roughly 18% of total EV spending last year — a tally that includes both direct support and tax incentives.

  • That's roughly the same level as 2017, but the share generally rose between 2012 and 2017 and "could very well rise again in [the] future."

Threat level: They note the EV market is growing at "whirlwind speed" even though they remain a tiny share of overall sales.

  • "But because it relies on government payments that cannot rise indefinitely, this growth raises risks and uncertainty even as battery costs come down," it states.

The intrigue: Government support is falling in 2 key markets, and the early signs show that it's affecting sales.

  • In China, the world's largest EV market, a cut in subsidies this year has eaten into sales.
  • In the U.S., sales growth has also slowed as consumer tax credits are phased down.

Go deeper

Updated 22 mins ago - Politics & Policy

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U.S. Capitol and stage are lit at sunrise ahead of the inauguration of Joe Biden. Photo: Patrick Semansky - Pool/Getty Images

President Biden has delivered his inaugural address at the Capitol, calling for an end to the politics as total war but warning that "we have far to go" to heal the country.

What's next: Biden has arrived at the White House and he will sign executive orders and other presidential actions.

50 mins ago - Podcasts

Podcast: After the Biden inaugural

Joe Biden was sworn in today as America's 46th president in an inauguration unlike any other in modern history.

Axios Re:Cap goes deeper into the speech, the atmosphere and what it all tells us about the incoming administration, with Axios political reporters Hans Nichols and Alexi McCammond.

Biden embarks on a consequential presidency

Photo illustration: Sarah Grillo/Axios. Photo: Joe Raedle/Getty Images

Donald Trump tried everything to delegitimize the rival who vanquished him. In reality, he's set Joe Biden on course to be a far more consequential U.S. president than he might otherwise have become.

The big picture: President Biden now confronts not just a pandemic, but massive political divisions and an assault on truth — and the aftermath of the assault on the Capitol two weeks ago that threatened democracy itself.