Electric Vehicles Recorded 20 Mn Sales in 2025 Despite Early 2026 Slowdown, Says Report

Global electric car sales reached a record high of more than 20 million units in 2025, representing 25% of all new cars sold worldwide. This follows a 20% growth rate from 2024, according to a May 2026 report titled ‘Global EV Outlook 2026’ published by the International Energy Agency (IEA).

However, preliminary data for 2026 indicates a more moderate growth trajectory. Global sales in the first quarter of 2026 were approximately 3.9 million, which is 8% lower than in the same period last year. This represents the first year-on-year decline in first-quarter sales since 2020, largely due to policy adjustments in major economies.

The market downturn in early 2026 is concentrated in China and the United States. In China, the reintroduction of a 5% purchase tax and the scaling back of trade-in subsidies have increased the effective price of entry-level electric models. In the United States, the termination of federal tax credits in late 2025 caused sales to fall by one-third in the first quarter of 2026. Conversely, Europe maintained sales with a 30% increase during the same period, supported by strict CO2 standards, stated the IEA report.

Market Policy Changes Impact

Rising fuel costs caused by the West Asia conflict have made electric mobility more attractive to consumers, according to the IEA report.

The closure of the Strait of Hormuz has led to significant increases in gasoline prices, increasing the potential savings of driving an electric vehicle. By April 2026, annual fuel cost savings for electric vehicle owners in the United States grew to $1,300. In the European Union, these savings increased by 35% compared to the previous year. Emerging economies, particularly in Southeast Asia, are also expanding incentives.

Competitive dynamics are changing as Chinese manufacturers expand their global reach. BYD has officially overtaken Tesla as the leading producer of battery electric cars. Chinese firms now account for 60% of the global EV market.

The report further undercored that heavy-duty transport is also shifting, with electric truck sales doubling in 2025 to capture 9% of global truck sales. Despite a slow start to the year, global sales are projected to reach 23mn by the end of 2026, accounting for 28% of all new car market sales.