Regional breakdown: four very different stories

Europe: +33% — the main engine of growth

European EV sales surged 33% year-over-year in July, driven by renewed purchase subsidies in France, Germany, and Britain . This continues a trend observed since mid-2025: Europe has become the primary driver of global EV demand, with sales hitting records in June and July . The European Union's increasingly stringent CO2 emissions standards for cars have also played a supporting role, pushing automakers to accelerate EV offerings .

China: -5% — slipping despite a record market share

China's EV-only sales fell 5% year-over-year in July, a surprising decline given the broader context . The country's wider New Energy Vehicle (NEV) category — which includes battery-electrics, plug-in hybrids, and fuel-cell vehicles — actually rose 23.7% year-over-year to 1.56 million units, according to the China Association of Automobile Manufacturers (CAAM) . The divergence is explained by a surge in plug-in hybrid sales, which are included in China's NEV count but are not all considered pure EVs in the narrower international data. NEVs reached a record 65.1% of all new car sales in China during July .

North America: -27% — the U.S. tax credit hangover

North American EV sales plunged 27% year-over-year, the steepest decline among major regions . Analysts attribute this almost entirely to the elimination of the U.S. federal EV tax credit by the Trump administration in September 2025 . The policy reversal has cooled what was a rapidly growing market, making EVs less price-competitive against gasoline vehicles in the world's second-largest auto market.

Rest of the world: +97% — emerging markets accelerate

The rest of the world — including markets in Southeast Asia, Latin America, Africa, and Oceania — saw EV sales nearly double, jumping 97% year-over-year . While starting from a smaller base, countries like India, Brazil, Indonesia, and Vietnam are adopting EVs rapidly, driven by expanding charging infrastructure, new model launches, and local policy incentives . Australia also recorded significant growth during the first half of 2026 .

The policy story: subsidies giveth and taketh away

The regional data for July 2026 tells a clear policy story:

• Subsidies boost demand: European markets that reintroduced or expanded purchase incentives (France, Germany, UK) saw immediate sales lifts.
• Subsidy removal cratered demand: The U.S. market, which lost its federal EV tax credit, saw a deep and sustained contraction.
• China's policy mix is more complex: China maintains generous EV purchase incentives at the local level, but economic uncertainty and a shift in consumer preference toward plug-in hybrids over pure battery EVs have created a nuanced market dynamic.

Outlook: 2026 on track for another record year

Despite the regional disparities, the global EV market is still on pace for a record year. The International Energy Agency (IEA) projects that EVs will account for 28% of all new car sales worldwide in 2026, up from 25% in 2025 . BloombergNEF expects over 23 million passenger EVs to be sold globally this year, an 11% increase over 2025 . The IEA notes that more than 90 countries recorded year-over-year EV sales growth during the first half of 2026 .

However, the July data underscores a key risk: the market's growth is increasingly dependent on a small number of policy-active regions, primarily Europe and a handful of developing markets. If the U.S. market remains depressed and China's pure EV growth stalls, the global trajectory could be shallower than the 2026 forecasts currently assume.

Regional breakdown: four very different stories

Europe: +33% — the main engine of growth

European EV sales surged 33% year-over-year in July, driven by renewed purchase subsidies in France, Germany, and Britain . This continues a trend observed since mid-2025: Europe has become the primary driver of global EV demand, with sales hitting records in June and July . The European Union's increasingly stringent CO2 emissions standards for cars have also played a supporting role, pushing automakers to accelerate EV offerings .

China: -5% — slipping despite a record market share

China's EV-only sales fell 5% year-over-year in July, a surprising decline given the broader context . The country's wider New Energy Vehicle (NEV) category — which includes battery-electrics, plug-in hybrids, and fuel-cell vehicles — actually rose 23.7% year-over-year to 1.56 million units, according to the China Association of Automobile Manufacturers (CAAM) . The divergence is explained by a surge in plug-in hybrid sales, which are included in China's NEV count but are not all considered pure EVs in the narrower international data. NEVs reached a record 65.1% of all new car sales in China during July .

North America: -27% — the U.S. tax credit hangover

North American EV sales plunged 27% year-over-year, the steepest decline among major regions . Analysts attribute this almost entirely to the elimination of the U.S. federal EV tax credit by the Trump administration in September 2025 . The policy reversal has cooled what was a rapidly growing market, making EVs less price-competitive against gasoline vehicles in the world's second-largest auto market.

Rest of the world: +97% — emerging markets accelerate

The rest of the world — including markets in Southeast Asia, Latin America, Africa, and Oceania — saw EV sales nearly double, jumping 97% year-over-year . While starting from a smaller base, countries like India, Brazil, Indonesia, and Vietnam are adopting EVs rapidly, driven by expanding charging infrastructure, new model launches, and local policy incentives . Australia also recorded significant growth during the first half of 2026 .

The policy story: subsidies giveth and taketh away

The regional data for July 2026 tells a clear policy story:

• Subsidies boost demand: European markets that reintroduced or expanded purchase incentives (France, Germany, UK) saw immediate sales lifts.
• Subsidy removal cratered demand: The U.S. market, which lost its federal EV tax credit, saw a deep and sustained contraction.
• China's policy mix is more complex: China maintains generous EV purchase incentives at the local level, but economic uncertainty and a shift in consumer preference toward plug-in hybrids over pure battery EVs have created a nuanced market dynamic.

Outlook: 2026 on track for another record year

Despite the regional disparities, the global EV market is still on pace for a record year. The International Energy Agency (IEA) projects that EVs will account for 28% of all new car sales worldwide in 2026, up from 25% in 2025 . BloombergNEF expects over 23 million passenger EVs to be sold globally this year, an 11% increase over 2025 . The IEA notes that more than 90 countries recorded year-over-year EV sales growth during the first half of 2026 .

However, the July data underscores a key risk: the market's growth is increasingly dependent on a small number of policy-active regions, primarily Europe and a handful of developing markets. If the U.S. market remains depressed and China's pure EV growth stalls, the global trajectory could be shallower than the 2026 forecasts currently assume.