London: Global sales of electric vehicles slowed at the start of 2026 as demand weakened in China and the United States, the world’s two largest auto markets. Industry data shows that about 1.2 million electric vehicles were sold worldwide in January, a drop of around 3 percent compared with the same month last year.
The slowdown was driven mainly by falling demand in China and North America. In China, EV registrations dropped sharply, reflecting reduced subsidies, tax changes, and cautious consumer spending. The wider Chinese car market also weakened, with passenger vehicle sales declining significantly amid economic uncertainty and ongoing price competition among manufacturers.
In the United States and North America, EV sales also declined, reaching their lowest levels in nearly two years. Analysts say changes to incentives, the expiration of some tax credits, and affordability concerns have made buyers more hesitant. Rising interest rates and high vehicle prices have pushed many consumers toward cheaper models or conventional vehicles.
Price competition in China has intensified as manufacturers try to attract buyers, squeezing profit margins and forcing companies to reconsider pricing strategies. Globally, affordability concerns are pushing consumers to favor lower cost vehicles instead of premium electric models.
Despite the slowdown in major markets, Europe recorded growth in EV sales, although at a slower pace than in previous months. Emerging markets showed strong momentum, with sales rising sharply in countries across Southeast Asia, Latin America, and parts of Africa. Chinese automakers are expanding exports to these regions, seeking new customers as domestic demand softens.
The weaker sales environment has forced several automakers to scale back their electric vehicle ambitions. Industry estimates suggest global carmakers have recorded tens of billions of dollars in write downs linked to EV investments. Many companies are now shifting focus toward hybrid vehicles and more affordable models as a transitional strategy.
Chinese manufacturers are also increasing overseas investments and partnerships to expand production abroad and avoid trade barriers. Their growing export presence is reshaping the global EV landscape, particularly in emerging economies.
Experts say the slowdown does not signal the end of the electric transition but highlights uneven growth. Policy support, charging infrastructure, affordability, and economic conditions will play a crucial role in determining how quickly electric vehicles gain wider acceptance in the coming years.