A Strong Year for Plug-In Vehicles Worldwide
Global sales of plug-in vehicles continued to expand in 2025, even amid uneven policy support and shifting market conditions. According to data from Benchmark Mineral Intelligence, battery-electric and plug-in hybrid vehicle sales reached 20.7 million units worldwide, representing roughly 20% growth year over year. The figures confirm that electrification remains the dominant long-term trend across the global auto industry.
Most major regions recorded solid gains, supported by a combination of new model launches, regulatory pressure, and consumer acceptance. However, one major market moved against the current.
North America Slows After Incentives End
North America was the clear outlier in 2025. Plug-in vehicle sales across the region declined 4% compared to 2024, despite a modest 1% increase in pure battery-electric vehicle sales. The primary driver was the elimination of the $7,500 U.S. federal EV tax credit, which had supported demand for several years.
The impact was immediate. Sales surged ahead of the incentive’s expiration, then dropped sharply afterward. Fourth-quarter 2025 plug-in sales fell 49% compared with the previous quarter, highlighting how dependent the U.S. market had become on purchase incentives.
Mexico and Canada Move in Opposite Directions
Mexico partially offset the U.S. slowdown. Plug-in sales there jumped 29% in 2025, driven largely by imports from China and growing consumer interest in affordable electrified vehicles.
Canada, by contrast, experienced a steep decline. Plug-in sales fell 41% after federal rebate funding ran out early in the year. While the government has signaled plans to reinstate incentives, the pause had a significant effect on short-term demand.
A Challenging Outlook for the U.S. in 2026
Benchmark projects that U.S. plug-in sales could fall another 29% in 2026. The firm cites limited consumer incentives, weaker regulatory pressure, and automakers shifting investment back toward internal combustion vehicles as key factors.
Although some states—most notably California—have announced plans to introduce or expand their own EV incentives, these efforts may not fully compensate for the loss of federal support.
Rapid Growth Across Emerging Markets
Outside North America, growth was far stronger. Regions grouped as the “rest of the world,” including South America, Southeast Asia, and Central Asia, recorded the fastest expansion. Plug-in sales in these markets rose 48% year over year to 1.7 million units in 2025.
Europe followed closely. Plug-in sales climbed 33%, reaching 4.3 million units, supported by emissions regulations and broader model availability. Chinese manufacturers played an increasingly important role, accounting for around 19% of Europe’s plug-in vehicle sales. BYD led the group, followed by SAIC, Xpeng, and Leapmotor.
Europe Reconsiders Its Trade Strategy
European policy could further accelerate Chinese participation. The European Union is considering replacing existing import tariffs—ranging from 7.8% to 35.3%—with a minimum pricing mechanism. If implemented, this shift could lower effective prices for Chinese-made EVs and further boost adoption across the region.
China’s Market Grows but Shows Signs of Cooling
China remained the world’s largest plug-in vehicle market, with sales up 17% to 12.9 million units in 2025. The composition of demand continued to shift. Pure EV sales rose 26%, while plug-in hybrids grew just 6%, indicating a gradual move away from combustion-based electrification.
However, growth slowed toward year-end. Fourth-quarter EV sales rose only 4% compared with Q4 2024, signaling a more mature market. With partial removal of purchase tax exemptions in 2026 and reduced emphasis on NEVs in China’s next five-year plan, further moderation appears likely.
Asia Shows Diverging Paths
Elsewhere in Asia, adoption varied sharply. Japan’s plug-in market grew just 6%, reflecting persistent consumer hesitation. South Korea, however, saw a 50% increase, driven by aggressive incentives and a growing lineup from Hyundai and Kia.
Stability Remains the Key to Growth
Despite slowing momentum in China and policy volatility in the United States, global demand for plug-in vehicles remains strong. The data suggest that markets with stable incentives and clear regulations continue to grow, while those with abrupt policy shifts face greater uncertainty heading into 2026.
Recommend Reading: GM Faces a Hard Reality About Plug-In Hybrids in the U.S.
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