Theme of the Day: Global EV sales reach 20.7 million units in 2025, growing by 20%

Benchmark Mineral Intelligence, specialising in EV and battery supply chain research and insights, reports that 2.1mn electric vehicles were sold globally in Dec 2025, bringing the end of year figure to 20.7mn EV units sold in the passenger car and light-duty vehicle segment.Snapshot electric vehicle sales in 2025 vs 2024: Global: 20.7mn, +20%, China: 12.9mn, +17%, Europe: 4.3mn, +33%, North America: 1.8mn, -4%, and Rest of World: 1.7mn, +48%.EuropeLooking at Europe, the dark horse has overtaken China as the fastest growing major region. This is despite weakened car manufacturing targets bookending the year as many had already prepared for the 2025 targets to come into force.The European EV market grew by 33% in 2025 compared with 2024, with 31% growth coming from Battery Electric Vehicles (BEVs) and 38% from Plug-in Hybrid Electric Vehicles (PHEVs) over the same period. The European electric vehicle market was marked by a year of legislative change, as EU tailpipe emissions targets were softened throughout the year. There was also increased support for consumer EV purchases, with several major European countries expanding or increasing subsidies.Over 2025, EV sales accelerated in several major markets. Large-volume countries such as Germany and the UK grew by 48% and 27%, respectively. EV sales in France began 2025 weakly and remained in negative territory for most of the year but finished with 2% growth overall after recovering in the final months, supported by subsidies.The softening of the 2025 EU emissions targets in May 2025, shifting compliance to an average of 2025–27 emissions rather than just 2025, provided car manufacturers with some relief. However, many manufacturers had already put plans in place to increase EV sales in order to meet these targets.Looking ahead to 2026, the key development in Europe is the proposed watering down of the 2035 emissions targets, reducing the requirement from a 100% tailpipe emissions reduction (relative to 2021 levels) to 90%, provided certain conditions are met, including the use of low‑carbon steel credits and renewable fuel credits. Under the proposed Automotive Package, manufacturers would also benefit from additional compliance flexibilities, including banking and borrowing of emissions performance for the 2030–32 period. Additional measures include new targets for corporate fleets, super‑credits for small vehicles, and increased support through the EU’s Battery Booster initiative.Entering 2026, we expect car manufacturers to maintain strong EV sales momentum, as they must still comply with the 2025–27 emissions standards. The revival of consumer subsidies will also play a key role, with several countries, including France, Germany, and Sweden, announcing support targeted at low- and middle‑income households. As a result, the European EV market is expected to grow by 14% in 2026.North America2025 was a turbulent year for the North American EV market. In the US, the elimination of federal tax credits on 30 September 2025, alongside the reduction of CAFE standards fines to zero and the introduction of protectionist policies aimed at onshoring vehicle production and supply chains, significantly weakened market momentum. As a result, US EV sales grew by just 1% in 2025.Amid these changes, the Canadian market performed poorly following the removal of subsidies early in 2025, causing EV sales to fall by 41% over the year. In contrast, EV sales in Mexico grew by 29%, with the majority of this growth driven by imports of Chinese EVs.The US market experienced two consecutive months of record EV sales in August and September 2025, as consumers rushed to take advantage of federal tax credits before their removal. This was followed by a sharp contraction in Q4 2025, with EV sales falling by 49% compared with Q3 2025.The outlook for the US EV market in 2026 remains weak, reflecting limited consumer incentives, a lack of supportive legislation, and OEMs scaling back investment in electrification in favour of internal combustion engine production. As a result, EV sales in the US are expected to decline by 29% in 2026.Looking further ahead, several range‑extended electric vehicles (REEVs) are expected to enter the US market over the next few years, including models from Stellantis, Scout, Ford, and Volvo. Both RAM (Ramcharger 1500) and Ford (F‑150 Lightning) have opted to introduce REEV variants rather than pure BEV versions for upcoming models. These vehicles are well aligned with North American consumer preferences for larger vehicles and reduce reliance on charging infrastructure by not operating solely on electricity. However, the appetite for REEV demand in the US is yet to be proven. The outlook for plug‑in hybrid electric vehicles (PHEVs) in the region is also weakening. Most recently, Stellantis announced plans to cut its entire PHEV line‑up for 2026, while maintaining its strategy for two upcoming REEV models.ChinaThe Chinese EV market grew by 17% in 2025 compared with 2024, with BEVs increasing by 26% and PHEVs by 6% over the same period. Year‑on‑year growth slowed markedly in the final quarter of 2025, reaching just 4% compared with Q4 2024. In contrast, H1 2025 EV sales grew by 33% year on year. This divergence largely reflects the fact that, in mid-2024, subsidies under China’s trade‑in scheme were increased, meaning that EV sales in the second half of 2025 were being compared against an elevated base in H2 2024.Growth in the Chinese EV market during 2025 was driven by intense domestic competition, aggressive pricing, and expanded model availability. As competitive pressures intensified domestically, Chinese car manufacturers increasingly turned to overseas markets. For example, BYD more than doubled its EV exports, rising from 0.4 million units in 2024 to over one million in 2025. These export flows were a key driver of EV growth in the rest of the world, with South America, Southeast Asia, and Central Asia among the main beneficiaries. The European market also saw a strong presence of Chinese‑produced EVs, which accounted for 19% of total EV sales in 2025.In 2026, EVs in China will face a purchase tax for the first time. Previously, EVs were fully exempt, but from 2026 they will be 50% exempt from purchase tax. In addition, the new 2026 trade‑in subsidy scheme will be proportional to vehicle price, rather than the flat‑rate subsidy applied in 2025, which had favoured smaller vehicles. As a result, average EV subsidy levels will be lower in 2026 than in 2025.Rest of World (RoW)In the RoW, the EV market grew by 48% in 2025 compared with 2024. A significant number of regions in the RoW had a strong presence of Chinese EV imports, including Southeast Asia that almost doubled year-on-year and in the final three months of the 2025 average over 55,000 EVs sold per month compared with an average of 32,000 per month in the final three months of 2024. South & Central America grew by 49% year-on-year, again led by a strong Chinese presence that accounted for over 85% of EV sales in the region.Japan’s EV market only grew by 6% year-on-year, with limited uptake of EVs in the region due to the strong presence of hybrid EVs. Japan’s EV penetration remains at 3% for the fourth consecutive year. In contrast, the South Korean market grew by 50% year-on-year, led by new EV models introduced by domestic OEMs and imported EVs, and government incentives.