Europe Booms, US Falls, China Slows: 2026 EV Sales Decline

Global electric vehicle (EV) sales have seen a significant decline in January 2026, with total units sold falling to 1.2 million. This marks a 3% decrease year-over-year and a striking 44% drop from December 2025, as reported by Benchmark Mineral Intelligence. The downturn has been primarily attributed to a sharp decline in the Chinese EV market.

China’s EV Market Contraction

China, recognized as the leading market for EVs globally, experienced a notable decline in sales, with approximately 600,000 EVs sold in January. This figure represents a 20% decrease year-over-year and a staggering 55% drop compared to December 2025. Key factors influencing this downturn include the introduction of a new purchase tax and reduced incentives for EV buyers.

• New Purchase Tax: The first purchase tax on EVs since 2014 has begun to impact consumer decisions.
• Less Generous Trade-In Subsidies: Incentives under the trade-in scheme have been reduced, affecting buyer motivation.

The changes led to increased buying activity in December, with many consumers opting to purchase vehicles ahead of the new policies. However, the overall car sales data indicate that the decline in EV sales did not coincide with an increase in gasoline vehicle sales.

Europe’s Strong Performance

In stark contrast, Europe demonstrated resilience in the EV market, selling over 320,000 units in January 2026. This represents a 24% increase from the prior year, despite a decline of 33% from December 2025. The European market’s growth is fueled by stringent emissions regulations and the reintroduction of subsidies in key countries.

• United Kingdom: 14% year-over-year growth in EV sales.
• Germany: 25% increase in EV sales.
• France: 41% growth in EV sales.

Automakers in Europe continue to work towards meeting EU emissions targets, which have spurred additional EV sales in the region. Despite solid numbers, countries like Norway and the Netherlands faced significant declines due to tax changes and shifts in consumer buying behavior.

North America Faces Challenges

North America has encountered a challenging start to 2026, with sales dropping to approximately 90,000 EVs, representing a 33% decrease year-over-year and a 27% decline from December 2025. The U.S. market witnessed the lowest monthly EV sales since early 2022, largely influenced by the removal of federal EV tax credits in late 2025.

Key factors affecting sales include:

• Elimination of federal EV tax credits.
• Changes in Corporate Average Fuel Economy standards.

Meanwhile, recent agreements between Canada and China regarding tariff rates for EVs might influence future sales. In January 2026, this agreement allowed for nearly 49,000 Chinese-made EVs to enter Canada at a reduced tariff rate.

Growth in Other Regions

Outside of the major regions, global EV sales surged, nearly doubling year-over-year to approximately 190,000 units. Thailand, South Korea, and Brazil led this growth, with Thailand experiencing a record month as EV sales tripled to over 44,000 units.

As the automotive market adapts to new policies, it is clear that the transition to electric vehicles will continue, even as the landscape becomes more uneven. Policies that support EV adoption will dictate market performance moving forward.