- Electric vehicles are gaining popularity all over the world, with the exception of North America.
- The lack of incentive programs for electric vehicles in the United States and Canada has slowed sales.
- Growth shifted outward: the growth rate of the “rest of the world” increased by 48%, and Europe by 33%, while the pace of growth in China slowed as taxes rose.
2025 was a good year for electric vehicles. Sales of battery-powered electric and hybrid vehicles have grown almost everywhere around the world, reaching 20.7 million units sold, according to a report released Wednesday by Standard metal intelligence. That’s about 20% more than in 2024, and shows that even during a year of ups and downs, the overall trend was still toward more electric and electrified vehicle sales.
This applies everywhere except North America, according to the research firm. There, electric vehicle sales fell 4% compared to 2024, although EVs rose 1%. This is a direct result of the US eliminating the $7,500 federal tax credit that helped boost plug-in sales for years. The slowdown in electric vehicle sales in the United States was partially offset by Mexico, which saw a 29% increase in electric vehicle sales in 2025 (most of which were imported from China).
End of the US federal tax credit It had an immediate impact on electric and electrified vehicle sales: I rose Just before it ended and then fell sharply. Q4 2025 sales were down 49% compared to Q3, a significant quarter-over-quarter decline.
The loss of the electric vehicle incentive also contributed to a 41% decline in plug-in sales in Canada in 2025. The federal rebate program exhausted its funds in early 2025 and has not been renewed, although the government has indicated it plans to bring it back.
Benchmark expects US plug-in sales to decline by 29% in 2026, due to “limited consumer incentives, lack of supportive legislation, and (manufacturers) reducing investment in electricity in favor of internal combustion engine production.” Not only have purchasing incentives disappeared, but so have the regulations that prompted car companies to sell cleaner cars.
Some states (particularly electrification leaders, ca) expressed their ambitions to advance and offer their own electric vehicle purchase incentives to keep the momentum of electric vehicle sales going.
The “Rest of World”, which includes South America, Southeast Asia and Central Asia, saw the highest year-over-year increase in plug-in sales, reaching 1.7 million units in 2025. This represents a 48% rise compared to 2024 numbers.
Photo by: Standard Mineral Intelligence
Europe had the second highest growth, with plug-in sales increasing by 33%, bringing total sales to 4.3 million units last year. Chinese plug-ins have also made their biggest mark Electric vehicle sales in Europe in 2025About 19% of all these cars sold on the continent come from China. BYD is the largest Chinese company in Europe, followed by SAIC, Xpeng,… Jump drive.
It is possible that more Chinese plug-ins will make their way into the region this year, as the European Union considers getting rid of the import tariffs it imposed on Chinese cars (ranging from 7.8% to 35.3% depending on the brand and how much government aid they received from the Chinese government) and replacing them with a lower price. This would make cars coming from China less expensive than they are today and boost sales of electric and electrified cars.
China is showing clear signs that the growth of its electric vehicles is a good thing Slow down After thriving for several consecutive years. However, the market saw strong gains.
The country’s plug-in sector grew by 17% in 2025 to 12.9 million units. Data shows that buyers are turning away from electrified cars that still have a combustion engine. Pure electric car sales rose 26%, while hybrid car sales rose only 6%. It’s worth noting that pure electric vehicle sales appear to be slowing at the end of the year, with Q4 numbers up just 4% compared to Q4 2024.
Electric vehicles (called “new energy vehicles” or NEVs in China) were previously exempt from purchase taxes in China, but that exemption will be partially removed in 2026. The market was already showing signs of slowing down and now that buyers have to cover 50% of the sales tax, things should slow down even more. The priority of new energy vehicles has also been downgraded in China’s next five-year plan, which dictates the direction the country is headed and which industries it focuses on.
Japanese car buyers remain unconvinced about electric vehicles. The country’s plug-in market grew by just a modest 6% in 2025, while neighboring South Korea saw a 50% year-on-year increase, helped by a wide range of new plug-in models from Hyundai and Kia, as well as a comprehensive incentive programme.
Overall, even with China’s slowdown and America’s incentives and regulation fluctuating, buyers from around the world are still proving their desire to deliver. In 2026, plug-in sales will continue to grow where incentives and rules remain constant – and will likely remain unpredictable where they are not.
