Global sales of electric cars declined by 3% last month as China moved to reduce subsidies and introduce a purchase tax on EVs, adding to consumer cooling after the U.S. federal government canceled EV tax incentives for buyers.
EVs have been touted as one of the leading factors in oil demand decline over the long term, so any disruption of the presumably stable trend of EV sales growth could eventually lead to revisions in oil demand projections.
Per data from Benchmark Mineral Intelligence cited by Reuters, global sales of electric cars stood at 1.2 million in January, with China booking a substantial decline of 20% to the lowest monthly sales figure since 2024, at 600,000. In North America, collective EV sales dropped by 33% to 85,000 cars. U.S. EV sales specifically saw the lowest monthly total since early 2022, Reuters noted in its report.
Europe was the only big market that saw an increase in EV sales last month, at 24% on December. However, the total, at more than 320,000 units, represented the slowed rate of sales growth since February 2025.
The rest of the world recorded a 92% increase in EV sales but the total was unimpressive compared to Chinese or European sales, at just 190,000 units. That total, however, was the highest ever recorded, Reuters noted.
“We’ve seen a growing number of exports reported from China for the EV market”, BMI data manager Charles Lester said, as quoted by the publication. “We’re expecting that to continue, trying to have a strong year of EV exports over 2026, targeting many different regions, including the likes of Southeast Asia, which is where we’ve seen a lot of growth over the past few months.”
Europe is also emerging as a potentially big market for Chinese electric cars, as the EU tries to advance its EV ambitions but finds it difficult to do with local cars, which are too expensive for many, even with subsidies.
By Irina Slav for Oilprice.com
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