US EV Sales Diverge From Global Boom as Tax Credits Expire
The global EV story and the American EV story have decoupled. The IEA’s Global EV Outlook 2026 shows worldwide electric car sales climbing toward roughly a third of all new vehicle sales this year, while the US is described bluntly as falling behind the global boom.
The US-specific shock. Last July’s One Big Beautiful Bill Act eliminated penalties for automakers missing fuel efficiency standards, removing a key incentive to sell EVs, and terminated federal tax credits for new and used EV purchases after September 2025. The Act also proposed an annual $250 fee on EV owners to offset the gas taxes that fund road maintenance. The result: US EV sales in Q4 2025 came in 45% lower than the same quarter a year earlier, and the IEA expects essentially zero government financial support for EV purchases in the US in 2026. Canada saw a milder version of the same dynamic — its EV sales share dropped from nearly 17% in 2024 to 11% in 2025 after a rebate program ended.
Meanwhile, the rest of the world accelerates. BloombergNEF’s Electric Vehicle Outlook 2026 puts global passenger EV sales at 23.3 million units this year, an 11% rise over 2025, powered overwhelmingly by China alongside rising momentum in Europe, Southeast Asia, India, Mexico, and Brazil. EV-Volumes forecasts 22.7 million global sales with share climbing to 24.7%, even as it flags slowing growth from softer demand and shifting incentives. Norway remains the outlier at the top: roughly 97% of new car sales there were electric in 2025, though the government is tightening its purchase tax exemption in 2026 to cars priced at $28,000 or below, phasing it out entirely by later this decade.
China’s export machine. The clearest signal of where EV manufacturing power now sits is Indonesia, where about 75% of 2025 electric car sales were Chinese imports, with the remainder split between domestic Chinese-brand production (led by Wuling) and imports from Vietnam and Thailand. Vietnam itself is the sharpest case study in mass-market EV adoption: penetration exceeded 40% in 2025, driven almost entirely by VinFast’s small, affordable models — proof that price, not charging infrastructure or range anxiety, has been the binding constraint in emerging markets.
Charging and batteries keep scaling regardless. Public EV charging connectors grew 28% globally in 2025 to 6.7 million, with 19% further growth in new installations expected in 2026. Ultra-fast charging connector counts in both Europe and the US grew nearly 50% year-over-year. On the battery side, GM, Ford, and Volkswagen are increasingly directing new cell manufacturing capacity toward stationary energy storage rather than passenger vehicles alone, as plug-in hybrids and range-extender EVs — which use smaller battery packs — take share from full battery-electric models in several major markets.
The takeaway. This isn’t a story about EV technology stalling — it’s a story about US industrial policy pulling in the opposite direction from nearly every other major auto market simultaneously. China, Europe, and emerging Asia are all treating electrification as the default trajectory for 2026 and beyond; the US is the one major market where 2026 policy is designed to slow it down.