Europe Surges Past China In EV Growth As Chinese Domestic Sales Drop 26%

While China‘s electric vehicle market stumbled, Europe raced ahead. In January 2026, global EV sales fell 3% year-over-year to 1.2 million units. The drop came from a major slowdown in China, but Europe told a very different story.

China sold around 600,000 EVs in January 2026. That’s down around 20-27% compared to January 2025. It’s also a massive 55% drop from December 2025. The main reasons were a demand pull-forward and new policy changes. For the first time since 2014, China applied a 5% purchase tax to most EVs. Trade-in subsidies also shifted to a proportional system, which reduced buyer incentives. Overall car sales in China fell too, and ICE vehicles didn’t make up the difference.

Europe, meanwhile, sold over 320,000 EVs in January 2026. That’s a 24% jump year-over-year. Sales were down 33% from December 2025, but that’s mostly seasonal. The growth continued the momentum Europe built throughout 2025. Several countries brought back subsidies. Germany’s EV sales rose around 25%. France’s grew sharply, around 41%. The UK saw around 14% growth. EU emissions targets also pushed automakers to sell more EVs.

Policy changes shaped markets beyond just China and Europe. Norway’s EV sales dropped sharply (around 71%) after its VAT exemption was tightened. The Netherlands saw around a 28% decline after a company car tax hike. In the US, federal EV tax credits were ended, adding to the global slowdown. Thailand was a bright spot, with EV sales roughly tripling to around 44,000 units under its EV3 scheme extension. Outside the major markets, global EV sales nearly doubled year-over-year in January, with the rest of the world totaling around 190,000 units.

Chinese automakers didn’t just compete at home. They’re also gaining ground in Europe. Chinese brands held 9.5% of Europe’s car market in December 2025. For all of 2025, their share hit 11%. They’ve expanded from Spain into Greece, Italy, and the UK. Their edge in battery technology helped drive that growth. Meanwhile, Trump’s chip tariffs starting April 2025 are expected to raise production costs for semiconductor equipment by as much as 32%, which could affect the advanced electronics supply chains that EV manufacturers depend on. China’s EV market boomed through much of 2025 before cooling.

Looking at the bigger picture, global EV sales were earlier projected to triple to 27 million units by 2026. China and Europe were expected to lead the way. But January 2026 showed that policy changes can shift momentum fast.

✅ Claims in this article were verified using AI-assisted fact-checking.