Global EV sales reached 1.2 million units in January — an impressive number at first glance. But look closer, and the story changes. According to Benchmark Mineral Intelligence, global sales fell 3% year-over-year and plunged 44% compared to December. The slowdown was largely driven by China, still the center of gravity for global EV demand.
China sold around 600,000 EVs in January, down 20% year-over-year and 55% month-over-month. Two major policy shifts hit at once: the reintroduction of a 5% purchase tax on EVs and a less generous trade-in subsidy scheme. After more than a decade of heavy incentives, 2026 marks a transition toward a more market-driven environment. When policy tailwinds fade, demand normalizes quickly.
Europe, however, moved in the opposite direction. The region posted over 320,000 EV sales in January, up 24% year-over-year. Emissions targets continue to pressure automakers, and renewed incentives in the UK, Germany, and France supported growth. Even so, seasonal declines from December were significant in several countries.
North America struggled. About 90,000 EVs were sold in January, down sharply from both last year and December. In the US, the removal of federal tax credits and broader policy shifts have forced automakers to rethink investment plans. Meanwhile, emerging markets are gaining momentum. Thailand, Brazil, and South Korea drove a 92% year-over-year increase across the “rest of world” category, with Thailand alone posting record sales.
My view? January’s decline doesn’t signal the end of EV growth — it signals a reset. As subsidies taper and policies evolve, markets will separate into those driven by structural demand and those propped up by incentives. The next phase of the EV transition won’t be about explosive growth everywhere — it will be about resilience where policy support fades.
