Governments worldwide are curtailing electric vehicle (EV) incentive policies. China, for instance, has reduced funding for its old-for-new vehicle replacement program, while its EV purchase tax exemption expired at the end of 2025.

China, the world's largest EV market, saw a 32% year-over-year decline in new EV and plug-in hybrid vehicle registrations in February, dropping to under 500,000 vehicles. This data comes from market analytics firm Benchmark Mineral Intelligence (BMI).

This decline is consistent with the 34% drop in total automobile sales for the month, as recorded by the China Association of Automobile Manufacturers (CAAM).

Tesla Model Y (right) and Hyundai Ioniq 5 (left) are two top-selling electric vehicles in the US. Photo: Edmunds

Globally, registrations decreased for the second consecutive month in February, with just over one million vehicles sold. This marks the lowest sales figure since the same period in 2024.

The North American market experienced a 35% drop to under 90,000 EV sales, marking its fifth consecutive monthly decline. This trend follows the conclusion of the US EV tax credit program in September 2025 and proposed initiatives by President Donald Trump's administration to further reduce CO2 emission standards.

Trump's policies and the global decrease in demand for electric vehicles have led some automakers with significant exposure to the US market to record over 70 billion USD in losses, according to Reuters.

Ford's electric vehicle sales dropped 70%. Honda's sales decreased 81%, and Kia's fell 52%.

Europe has also lagged in achieving its emission targets. However, the continent's electric vehicle sales increased 21% in February, maintaining growth despite a slower pace compared to nearly all of 2025.

Germany and France are leading the region's growth. Electric vehicle sales in Germany rose 26% after the country introduced a new subsidy program early this year. The French market expanded 30%, supported by an existing incentive program.

Italy is also experiencing rapid growth. Electric vehicle sales there increased 23% compared to January, marking its highest EV sales month, according to Electrek.

This strong growth follows the Italian government's launch of a new subsidy program in October 2025 aimed at boosting EV adoption. Households can receive up to 11,000 euro (12,700 USD) in support, while smaller businesses may receive up to 20,000 euro (23,200 USD).

Electric vehicle registrations in the rest of the world increased 78% to over 180,000 vehicles. This growth is attributed to Chinese automakers continuing to expand their presence in Asian and Australian markets, as well as in Europe, while also countering intense domestic competition.

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