Why will the demand for new energy vehicles decrease after the subsidy for new energy vehicles is cancelled?

On the whole, new energy vehicles are still new things brought by technological innovation, and there are certain uncertainties. Subsidies encourage its development in the general direction, but consumers' choices will gradually become rational from trying new things, so there will be some demand reduction. The main reasons are as follows:

First, subsidies reduce the selling price, highlight the price attractiveness of new energy vehicles, and initially increase their market demand. It is undeniable that many people buy new energy vehicles because the subsidized prices are attractive enough. It is a good consumption choice to spend a little money to do big things, or to start with a car with higher technical content, better performance and more fashion at the same price.

Second, the cancellation of subsidies, coupled with the exposure of new energy vehicle technology shortcomings, consumers are more rational. The demand or popularity of goods is ultimately determined by the market. At present, gasoline vehicles are still strong competitors of new energy vehicles. The former has high technical maturity, and the cost of car use is equivalent to that of the latter, while the maintenance and car use cost of the latter does not reflect the overwhelming advantage of new technology. In addition, the cancellation of subsidies has pushed consumers' rational choice to impulsive consumption.

Third, the demand will ultimately be determined by the nature of the goods. The demand for new energy vehicles will gradually stabilize until the technology and market reach an understanding. This requires both technical stability and market postgraduate entrance examination.