Global EV Sales Accelerate Despite US Tariffs and Vanishing Subsidies

Image Credit: BYD

Nearly 11 million electric vehicles were sold worldwide in the first seven months of 2025, marking a 27% increase compared to the same period last year. This growth occurred despite an initial slowdown linked to political decisions made in Washington.

According to EV research firm Rho Motion, 10.7 million units were sold between January and the end of July. China once again dominated the market with 6.5 million sales, followed by Europe with 2.3 million, North America with one million, and roughly 900,000 spread across other regions.

Sales momentum was robust in China and Europe, both of which posted year-on-year gains of around 30 per cent. Emerging markets delivered even more impressive growth, up 42 per cent collectively. BloombergNEF has singled out Vietnam, Thailand, and Brazil as standout performers in the global EV push.

Consumer preferences, however, vary sharply by region. In China, pure battery electric vehicles are outpacing hybrids at an increasingly rapid pace. In Europe’s two largest markets, Germany and the United Kingdom, drivers remain slightly more inclined towards hybrid models.

The Months Ahead: Tariffs and Tax Credit Changes

In contrast to the rapid expansion elsewhere, North American sales between January and July grew by just 2 per cent compared to last year.

Several factors have slowed momentum. The pandemic years dampened investor confidence in building new manufacturing plants and charging infrastructure, and political uncertainty in the run-up to national elections added another layer of hesitation.

Rho Motion notes that the full impact of President Donald Trump’s policy agenda has yet to be felt in the EV market. The federal government has rolled out sweeping tariffs on imported cars, batteries, and components, with the rates and timelines shifting repeatedly in recent months. Legal challenges are ongoing. Agreements with South Korea, Japan, and the European Union have fixed a 15 per cent tariff on imported cars from those markets.

On the consumer side, a significant change is looming. The tax credits offered under the Inflation Reduction Act will no longer be available after 30 September 2025. These credits currently provide up to $7,500 off the purchase of a new EV and up to $4,000 for a used one.

Rho Motion expects a short burst of buying in the US ahead of the deadline, followed by a likely slowdown in demand.

The Global Picture

In July alone, 1.6 million electric vehicles were sold worldwide, representing a 21% increase from the previous year.

China continued to post substantial numbers, with July sales up 12 per cent despite an overall decline in passenger car sales. Half of all vehicles sold to individuals and families during the month were electric.

One driver of demand has been the government’s car trade-in scheme, introduced last year. The programme makes it easier for drivers to scrap or resell their old cars. In late July, Beijing allocated the third-quarter round of funding, with the final 2025 allocation expected in October. Since its launch, 5.2 million passenger cars have gone through the scheme, with roughly half scrapped and the rest resold and replaced.

In Europe, Germany and the UK continue to lead the way. Both countries experienced significant year-on-year growth in July, with Germany increasing by 43 per cent and the UK by 32 per cent. Sales in Italy are also rising.

France presents a more mixed picture. July sales rose 9 per cent year-on-year, but overall numbers for the year remain down 11 per cent. To counter this, the government will relaunch its EV leasing programme for low-income households on 30 September.

The scheme will enable drivers to lease new or used electric cars and vans for monthly payments starting from as little as € 100. The government will provide guarantees to sellers to make such offers viable, with a target of 50,000 leases lasting at least three years each.