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Global EV Growth Shifts to Emerging Markets as China Cools

New IEA data and industry forecasts show electric vehicle demand pivoting toward emerging markets and used EVs, while policy shifts in China and the US reshape automaker strategies for 2026.

Global EV Growth Shifts to Emerging Markets as China Cools
#electric vehicles #EV sales #emerging markets #EV policy #used EVs #charging market

Global EV Growth Shifts to Emerging Markets as China Cools

Electric vehicle demand is entering a more uneven but structurally resilient phase, with emerging markets in Asia and Latin America becoming key growth engines while China and the United States confront policy-driven slowdowns and shifting corporate strategies, according to new data from the International Energy Agency and industry analysts.

Global Growth Slows but Remains Strong

Global electric vehicle sales rose about 25% in 2024 to roughly 17 million units, marking a transition to a “more measured but resilient phase” for electrification shaped by changing policies, trade frictions and rapid technology evolution, according to the latest forecast from EV Volumes’ December 2025 update.1

The International Energy Agency’s Global EV Outlook 2025 similarly characterizes the market as moving beyond an early exponential phase into a period where incremental growth will rely more heavily on targeted regulation, cost reductions and infrastructure buildout rather than blanket subsidies.2

Industry data for January 2026 show the new landscape clearly: global EV sales reached about 1.2 million units, down 3% year-on-year, as a sharp contraction in China offset gains elsewhere, according to Benchmark Mineral Intelligence.3

Emerging Markets Become New Centers of Demand

While mature markets in Europe, China and North America slow, emerging economies are taking a larger share of incremental demand. The IEA reports that electric car sales in emerging markets in Asia and Latin America jumped more than 60% in 2024 to nearly 600,000 units—roughly equal to the size of the entire European EV market five years earlier.4

In the first quarter of 2025, several of these markets accelerated further:

  • Brazil recorded more than 30,000 electric car sales in Q1 2025, up about 40% from the same period in 2024, according to the IEA’s Trends in Electric Car Markets analysis.5
  • India saw electric car sales grow approximately 45% year-on-year in the same period, nearing 35,000 units, the IEA reports.5
  • Southeast Asia posted nearly 50% growth in electric car sales in 2024, with EVs reaching about 9% of total car sales across the region, based on the IEA executive summary.4

The IEA attributes this momentum to a combination of import incentives, local assembly programs, and tightening fuel-efficiency and emissions standards in these economies.2 Automakers have been ramping up smaller, lower-cost models and local partnerships to capture this demand, according to the agency’s industry strategy analysis.2

China’s EV Market Tightens on Policy Changes

China, which remains the world’s largest EV market by volume, is entering a more constrained phase. Benchmark Mineral Intelligence reports that China’s EV market contracted about 20% in January 2026 compared with January 2025, pulling global volumes slightly negative despite growth in other regions.3

Analysts cited two policy shifts that took effect at the start of 2026:

  • Reduced tax support: Beijing cut its EV tax break in half for 2026, weakening one of the sector’s most important demand-side supports, according to Bloomberg reporting on the country’s policy framework.6
  • Tighter scrappage incentives: A revised cash-for-clunkers program introduced new restrictions on eligibility, limiting the extent to which replacing older internal combustion vehicles with EVs will be subsidized, Bloomberg noted.6

Bloomberg said analysts now expect only a “slight slowdown” in overall Chinese EV sales growth rather than an outright contraction for the full year, but manufacturers are likely to face more margin pressure and intensifying competition as they chase a more slowly growing pool of buyers.6

US Demand Proves Volatile Amid Incentive Shifts

In the United States, EV demand has shown sharp month-to-month swings tied to changes in federal consumer incentives. The International Council on Clean Transportation (ICCT) reported that battery-electric vehicle (BEV) sales fell about 25% in October 2025 compared with October 2024 after the expiration of a major federal purchase incentive.7

However, ICCT data also show that BEV sales in September 2025 surged more than 40% year-on-year as buyers rushed to take advantage of the credit before it lapsed, illustrating what the group described as “underlying strength of EV demand despite near-term disruptions.”7

Broader US registration and market share data reflect a plateau rather than a collapse:

  • BEVs accounted for 7.5% of US light-vehicle sales in Q1 2025 and 7.4% in Q2 2025, little changed from late 2024, according to CareEdge’s Electric Vehicle Sales and Market Share report.8
  • Overall electrified vehicle market share—including hybrids and plug-in hybrids—continued to rise modestly, the same data indicate.8

JPMorgan’s analysis of the “EV boom” notes that a mix of federal policy support, including prior tax credits and infrastructure investments, along with state-level zero-emission vehicle mandates, has laid a structural foundation for continued US electrification even as specific consumer subsidies phase up or down.9

Automakers Adjust Strategy, Not Exit the Segment

Manufacturers are responding to the more complex demand backdrop with changes in product planning and capital allocation rather than abandoning EV investments.

Autoblog reports that US EV registrations slipped in 2025 for the first time in roughly a decade, but attributes the slowdown partly to model cycles, pricing and incentive changes.10 In response, several major automakers are reshaping portfolios:

  • Ford is “not walking away from the EV segment,” Autoblog reports, but is pivoting toward a new generation of compact, more affordable models. The company’s first so-called “Universal EV,” a Maverick-sized pickup, is scheduled for 2027, signaling a focus on high-volume, lower-cost segments.10
  • Toyota, long viewed as cautious on battery electric vehicles, has at least three new EV models coming to market over the coming year, according to Autoblog’s account of the brand’s product pipeline.10

Product plans for the US market underscore that automakers still expect growth: InsideEVs reports that manufacturers intend to launch 32 new electric vehicle models in the US in 2026 alone, spanning SUVs, trucks and premium segments.11 Car and Driver similarly tracks an “expansive” list of new EV nameplates slated for the 2026 model year, implying ongoing capital deployment across multiple brands.12

Industry research from EV Electric Cars, a news and analysis site, characterizes 2026 as a new era in which EVs remain a small share of the total market but continue to gain appeal through greater range, performance, model diversity and faster charging, even as growth becomes more differentiated across regions and segments.13

Used EVs Emerge as a Major Volume Channel

A rapid expansion of the used EV market is also reshaping the industry’s demand profile and pricing power. Recurrent, which tracks secondhand EV transactions, reports that used EV sales as a segment now exceed the sales of every new EV model except Tesla’s Model Y and Model 3 in the US.14

Recurrent’s Q4 2023 data show:

  • Its used EV price index fell about 32% year-over-year to an average transaction price of roughly $27,800, returning to levels last seen in early 2021.14
  • Inventory and sales volumes for used EVs have broadened significantly as first-generation lease returns and early adopters’ trade-ins reach the secondary market.14

Analysts at JPMorgan have argued that declining battery costs and a deeper used market are likely to expand EV adoption among price-sensitive buyers over the next several years, particularly if total cost of ownership remains favorable compared with internal combustion vehicles.9

Infrastructure and Supply Chain: Charging Cables and Trade Risks

Downstream infrastructure spending continues to track the global EV rollout. A recent market analysis cited by Yahoo Finance projects the global EV charging cable market will reach about $20 billion by 2032, driven by expanding residential and commercial charging networks, especially in Europe.15

According to that report, Europe maintains a lead in charger density and regulatory support; electrification mandates, decarbonization targets and sustained public and private investment are expected to underpin cable demand through the decade.15

The IEA’s 2025 outlook warns that while battery manufacturing capacity and raw material supply are catching up with announced EV targets, trade uncertainty and evolving industrial policies—such as local content rules and critical mineral sourcing requirements—pose ongoing strategic challenges for automakers and suppliers.2

EV Volumes likewise notes that policy shifts and trade tensions are among the key variables shaping its December 2025 forecast, calling the current phase “measured but resilient” rather than speculative, as more capacity comes online under stricter regulatory scrutiny.1

Outlook: Policy and Cost Will Shape the Next Wave

Multiple sources, including the IEA, ICCT and JPMorgan, point to a convergence of three factors that will determine the next phase of EV adoption:

  • Policy clarity: Long-term emission standards, zero-emission mandates and stable incentive structures in major markets.
  • Cost competitiveness: Continued battery cost declines, scale efficiencies and access to low-cost models, especially in emerging markets.
  • Ecosystem maturity: Expansion of public and private charging, growth of the used EV market and robust supply chains for critical minerals and components.

While short-term registration data in China and the US suggest a more challenging environment in 2026, global analyses indicate that underlying demand—particularly in emerging markets and the used vehicle channel—continues to support the auto industry’s long-range electrification strategies.

References & Links

  • International Energy Agency – Global EV Outlook 2025: Executive Summary (emerging markets growth, Southeast Asia share, policy context)4
  • International Energy Agency – Global EV Outlook 2025: Trends in Electric Car Markets (Brazil and India Q1 2025 data)5
  • International Energy Agency – Global EV Outlook 2025 – Analysis (global deployment, battery demand, industry strategies)2
  • EV Volumes – Global EV Outlook – December 2025 Update (25% global growth to ~17M in 2024; “measured but resilient phase”)1
  • Benchmark Mineral Intelligence – Global EV sales reached 1.2 million units in the opening month of 2026 (January 2026 volumes and China contraction)3
  • Bloomberg – Electric Vehicles Have a Bumpy Road Ahead in 2026 (China tax break cuts and cash-for-clunkers restrictions)6
  • International Council on Clean Transportation – Record electric vehicle sales show American demand (US BEV surge before incentive expiry and October 2025 drop)7
  • CareEdge – Electric Vehicle Sales and Market Share (US – Q3 2025 Updates) (US BEV share plateau and electrified share trends)8
  • JPMorgan – What is the Electric Vehicle (EV) Boom? (US policy backdrop, long-term adoption drivers)9
  • Autoblog – EV Registrations Slip for the First Time in a Decade as Growth Stalls (US registration decline, Ford and Toyota strategies)10
  • InsideEVs – Every New EV Launching in 2026 in the U.S. (32 new US-market EV launches in 2026)11
  • Car and Driver – Every New Electric Vehicle Model for Sale in the US for 2026 (breadth of 2026 EV model lineup)12
  • EV Electric Cars – EV Sales Growth in 2026: Global Trends and Market Insights (characterization of 2026 as a new era for EVs)13
  • Yahoo Finance – Global EV Charging Cable Market to Reach USD 20 Billion (charging cable market forecast, European infrastructure lead)15
  • Recurrent – Used Electric Car Prices & Market Report — Q1 2026 (used EV price index and volume relative to new models)14

Footnotes

  1. EV Volumes, “Global EV Outlook – December 2025 Update.”
    https://ev-volumes.com/ ↩ ↩2 ↩3

  2. International Energy Agency, “Global EV Outlook 2025 – Analysis.”
    https://www.iea.org/reports/global-ev-outlook-2025 ↩ ↩2 ↩3 ↩4 ↩5

  3. Benchmark Mineral Intelligence, “Global EV sales reached 1.2 million units in the opening month of 2026.”
    https://source.benchmarkminerals.com/article/global-ev-sales-reached-1-2-million-units-in-the-opening-month-of-2026 ↩ ↩2 ↩3

  4. International Energy Agency, “Executive summary – Global EV Outlook 2025 – Analysis.”
    https://www.iea.org/reports/global-ev-outlook-2025/executive-summary ↩ ↩2 ↩3

  5. International Energy Agency, “Trends in electric car markets – Global EV Outlook 2025.”
    https://www.iea.org/reports/global-ev-outlook-2025/trends-in-electric-car-markets-2 ↩ ↩2 ↩3

  6. Bloomberg, “Electric Vehicles Have a Bumpy Road Ahead in 2026.”
    https://www.bloomberg.com/news/newsletters/2026-01-06/electric-vehicles-have-a-bumpy-road-ahead-in-2026 ↩ ↩2 ↩3 ↩4

  7. International Council on Clean Transportation, “Record electric vehicle sales show American demand: will US automakers deliver or retreat?”
    https://theicct.org/record-electric-vehicle-sales-show-american-demand-will-us-automakers-deliver-or-retreat-nov25/ ↩ ↩2 ↩3

  8. CareEdge, “Electric Vehicle Sales and Market Share (US – Q3 2025 Updates).”
    https://caredge.com/guides/electric-vehicle-market-share-and-sales ↩ ↩2 ↩3

  9. JPMorgan, “What is the Electric Vehicle (EV) Boom?”
    https://www.jpmorgan.com/insights/investing/investment-trends/what-is-the-electric-vehicle-boom ↩ ↩2 ↩3

  10. Autoblog, “EV Registrations Slip for the First Time in a Decade as Growth Stalls.”
    https://www.autoblog.com/news/ev-registrations-slip-for-the-first-time-in-a-decade-as-growth-stalls ↩ ↩2 ↩3 ↩4

  11. InsideEVs, “Every New EV Launching In 2026 In The U.S.”
    https://insideevs.com/features/783999/every-new-electric-car-ev-2026/ ↩ ↩2

  12. Car and Driver, “Here’s Every New Electric Vehicle Model for Sale in the US for 2026.”
    https://www.caranddriver.com/features/g32463239/new-ev-models-us/ ↩ ↩2

  13. EV Electric Cars, “EV Sales Growth in 2026: Global Trends and Market Insights.”
    https://evelectriccars.com/ev-sales-growth-2026/ ↩ ↩2

  14. Recurrent, “Used Electric Car Prices & Market Report — Q1 2026.”
    https://www.recurrentauto.com/research/used-electric-vehicle-buying-report ↩ ↩2 ↩3 ↩4

  15. Yahoo Finance, “Global EV Charging Cable Market to Reach USD 20 Billion …”
    https://finance.yahoo.com/news/global-ev-charging-cable-market-144500317.html ↩ ↩2 ↩3

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