Regional Insights

China

The global leader in EV sales saw a 15% YoY decline for the first time since the COVID-19 pandemic. Overall Chinese domestic passenger vehicle sales also declined by 4% YoY during the period. In Q1 2026, EV sales in China recorded 2.18 million units, among which BEVs accounted for 59%, while PHEVs and EREVs accounted for 31% and 10%, respectively.

The rollback of tax exemptions for new vehicle purchases created a significant headwind for China’s mass market and entry-level EV segments. At the same time, after several years of rapid growth, the country's EV market has begun to mature, with first-time buyer demand nearing saturation and many consumers delaying purchase decisions. Compounding these challenges were intense price competition among domestic automakers such as BYD, Geely, Changan and Chery, lack of meaningful financing incentives, and squeezed profitability across the value chain. Moreover, as domestic demand weakened, leading Chinese automakers accelerated their international expansion efforts, redirecting production capacity and investment toward overseas markets. While this strategy helped offset slowing growth at home, it also contributed to softer domestic EV sales during Q1 2026.

For the first time, Geely Holding emerged as the best-selling EV group, pushing BYD Auto to second place. BYD was among the hardest-hit automakers during the quarter, with its China sales falling by a staggering 53% YoY. Several other major EV players, including Tesla, SGMW, Changan, GWM and Xpeng, also reported YoY sales declines, reflecting the broader weakness in China’s EV market.

EV Sales Share of Top EV Makers in China by Powertrain, Q1 2026

Europe

Europe emerged as the fastest-growing major EV market in Q1 2026 with sales rising nearly 32% YoY, supported by stricter CO₂ emission regulations and improving charging infrastructure. Germany remained the largest EV market in Europe by sales volume, followed by the UK and France. However, when measured by EV penetration, the Nordic countries continued to lead the region. Norway maintained its dominant position with EVs accounting for 99% of its new passenger vehicle sales, followed by Denmark (77%), Sweden (65%) and Finland (55%), highlighting the region’s progress in vehicle electrification.

Europe also witnessed a growing number of partnerships between Chinese and European automakers, underscoring the increasing influence of Chinese EV technology, software capabilities and manufacturing expertise in the region. Beyond the Stellantis-Leapmotor and Volkswagen Group-Xpeng joint ventures, Nissan UK and Chery International recently signed a non-binding MoU to establish dedicated production capacity for Chery-branded passenger vehicles at Nissan’s Sunderland plant in the UK. Similarly, Stellantis expanded its collaboration with Dongfeng Motor, enabling the distribution of Dongfeng's Voyah EVs across Europe. These partnerships also underscore the growing reliance of European automakers on Chinese EV technology and expertise, while simultaneously creating new opportunities for Chinese brands to deepen their footprint and expand market share across the region.

Chinese-branded vehicles accounted for 30% of Europe’s EV sales in Q1 2026, up 62% YoY. The strong growth reflects the increasing competitiveness of Chinese automakers, which continue to gain market share despite rising trade and regulatory challenges.

EV Sales Share of Top EV Makers in Europe by Powertrain, Q1 2026

USA

While most major markets continue to embrace electrification, the US has taken a more cautious approach by rolling back EV subsidies and incentives, such as the Trump administration’s cancellation of the $7,500 tax credit. This policy shift, combined with slower-than-expected consumer adoption and mounting EV related losses, has prompted several automakers to reassess their electrification strategies and implement production delays, investment cuts and model cancellations. As a result, US EV sales declined 29% YoY in Q1 2026, indicating growing consumer preference for hybrid (HEV) and conventional ICE vehicles.

Despite the slowdown, long-term EV ambitions remain intact. Ford unveiled its Universal EV Program in September 2025 to develop a mid-size electric pickup priced from $30,000. The vehicle is set to go on sale in 2027. The program focuses on cost-efficient manufacturing through technologies such as giga casting, structural LFP batteries, 400V electrical architecture, zonal electronics and integrated X-in-1 drive systems. Meanwhile, GM is reviving the Chevrolet Bolt EUV, while Volkswagen, Audi and Rivian continue to advance next-generation EV platforms, underscoring the industry's continued commitment to electrification.

Emerging EV Markets Gain Momentum

South Korea

As of Q1 2026, one in every four passenger vehicles sold in South Korea was an EV. The country emerged as one of the fastest-growing EV markets globally during the quarter, with sales surging 148% YoY.
Hyundai Motor Group and Kia together commanded more than 55% of the domestic EV market, followed by Tesla. Combined, these manufacturers accounted for nearly 80% of the country’s total EV sales. South Korea’s strong EV performance was supported by its well-established supply chain for critical EV components, particularly batteries, as well as continued policy support and investments in charging infrastructure. These factors have helped accelerate EV adoption and strengthen the country's position as a key global EV market.

Southeast Asia

Southeast Asia accounted for 5% of global EV sales in Q1 2026, making it the world's fourth-largest EV market. EV sales in the region grew by an impressive 81% YoY, driven by strong demand across key markets. Thailand, Vietnam and Indonesia emerged as the top three countries by EV sales volume. BYD Auto, VinFast and Chery Automobile were the leading OEMs in the region, collectively accounting for nearly 70% of total EV sales. Overall, Chinese automakers represented almost two-thirds of Southeast Asia's EV market, highlighting their growing influence across the region. At the same time, local brands are beginning to strengthen their presence. Vietnam's VinFast has emerged as a strong domestic challenger to Chinese manufacturers, while Malaysia's Proton and Perodua have recently entered the EV segment.

India

EV adoption in India remains at an early stage, with EVs accounting for just 5% of total passenger vehicle sales in the country in Q1 2026. While EV penetration is expected to increase significantly by 2030, achieving this growth will require substantial investments in charging infrastructure, grid modernization and broader ecosystem development.

India’s EV market is currently dominated by BEVs, but the landscape is set to evolve with the introduction of PHEVs. JSW MG Motor, the joint venture between JSW and SAIC, along with JSW's partnership with Chery Automobile, is expected to launch mass-market PHEV models in India later this year, broadening consumer adoption. Moreover, VinFast’s entry, supported by its manufacturing facility in India, is also helping strengthen competition and expand EV offerings in the country. Meanwhile, market leader Maruti Suzuki has entered the BEV segment with its Battery-as-a-Service model, which reduces upfront ownership costs and improves affordability compared to competing offerings from Tata Motors and Mahindra.

Oceania

Led by Australia, EV sales in the Oceania region grew 59% YoY in Q1 2026. Australia remained the primary growth driver, supported by a combination of favorable market conditions and policy incentives. The influx of affordable, high-quality EVs from Chinese automakers (with BYD set to offer 13 models in Australia by the end of 2026) has significantly lowered the entry barrier for consumers, while persistently high fuel prices have strengthened the economic case for electrification. Government support has also played a crucial role, particularly through Fringe Benefits Tax (FBT) exemptions for EVs purchased via novated leasing schemes, improving affordability for many buyers. Besides, the Australian EV market has become increasingly diverse, with a wide range of price points and vehicle segments. The broader product portfolio has expanded consumer choice and further accelerated EV adoption across the country.

Outlook

The global EV market is expected to maintain steady growth over the next decade, with sales expected to increase from 21.8 million units in 2026. By 2030, global EV sales share is expected to reach 36% (38 million units) with a CAGR of 11% between 2026 and 2030, according to Counterpoint’s Global Passenger Vehicle Forecast by Powertrain. Declining battery costs, new battery technology enabling rapid charging, wider range of affordable model options and continued expansion of charging infrastructure are expected to make BEVs increasingly attractive. At the same time, PHEVs, especially EREVs, are likely to remain an important bridge technology in markets where charging infrastructure and affordability continue to be challenges.

EV Sales (Mn Units) and CAGR Forecast by Region: 2025-2035F

EV growth post-2030 is expected to become more diversified across regions. Although China and Europe will remain the largest contributors, their markets are expected to witness demand saturation over the next four years. On the other hand, EV sales in emerging markets such as India, Southeast Asia, Oceania, South Korea, Latin America and the Middle East are likely to expand significantly.

Mature markets like China and Europe are still expected to remain the key drivers of global EV growth through 2035. Across both regions, supportive policies, expanding infrastructure and broader model availability will continue to strengthen EV adoption, with BEVs remaining the dominant long-term technology. In contrast, while the US EV market has taken a step back in the near term, its long-term outlook remains positive, supported by continued investments in affordable EV development, dedicated in house EV platforms, battery technologies, and domestic manufacturing capacity. The potential return of supportive EV policies after 2028 is also expected to provide an additional boost to adoption. With these, the US is projected to regain momentum through 2035.

EV Sales Share Forecast for Top Regions, 2025-2035F

After 2030, the global EV market is expected to continue growing steadily, reaching around 53 million units by 2035, with a CAGR of about 10% between 2030 and 2035. By then, EVs are projected to account for nearly 51% of global passenger vehicle sales. While growth will be slower than in the early years of EV adoption, the market will enter a more stable and sustainable phase. Falling battery costs, improved vehicle affordability, expanding charging infrastructure and continuous technology improvements will support further adoption. Growing consumer confidence and a wider range of models will also help drive EV demand across both developed and emerging markets.