Global electric vehicle sales are slowing down after China tightened incentives

The above data was announced by market analysis company Benchmark Mineral Intelligence (BMI) on December 12, with sales growth slowing down.

In November, electric vehicle sales in China reached 1.3 million units, up 3%, the lowest year-on-year increase since early last year. They are the world’s largest market, accounting for more than half of global sales. Beijing’s removal of electric vehicles from the list of strategic industries and reduction of subsidies at the end of the year is expected to affect general user psychology.

North America also continued a steep decline from October, with electric vehicle registrations dropping 42%, to more than 100,000 vehicles. This situation is similar to the predictions of many auto businesses, after the administration of US President Donald Trump stopped providing incentives for this type of vehicle.

Meanwhile, Europe recorded an increase of 36%, reaching 400,000 vehicles. Purchases of battery electric vehicles and plug-in hybrid vehicles maintain strong growth thanks to incentive programs of many member countries. In France, the market is recovering after many months of quiet because the government reduced subsidies in early 2025.

Italy recorded record sales of nearly 25,000 units in November, after launching a program giving up to 12,000 USD to each person converting a gasoline car to electric. To date, the program has allocated 597.3 million euros (about 700 million USD), expected to replace about 39,000 fossil fuel vehicles.

However, cumulatively for the whole year 2025, the Chinese market still recorded an increase of 19%, reaching 11.6 million vehicles, pushing global sales to 18.5 million, an increase of 21%.

BMI believes that demand for electric vehicles will continue to grow at different rates, shaped by policy support. Among them, two markets with large fluctuations are China and the US. 2026 is the year the era of incentives for electric vehicles will end, when they will start being subject to a 5% sales tax.

Meanwhile, sales in the US are forecast to continue to decline. “Tax credit policy has a huge impact on the market,” said Charles Lester, BMI’s data manager.

Last week, Mr. Trump cut the corporate average fuel economy (CAFE) standard to 34.5 miles per gallon of fuel (equivalent to 6.82 liters per 100 km), instead of 50.4 (4.67 liters per 100 km). That is, the average car can travel 100 km with 6.82 liters of gasoline, instead of 4.67 liters as prescribed by the previous President.

The European Union (EU) is expected to set back its electric vehicle target. Next week, they plan to announce a support package for the auto industry, including loosening regulations banning gasoline cars by 2035.