Global EV Sales Drop 3% in January 2026 as Europe Surges and China Cools | Taha Abbasi

The Global EV Market Just Hit a Speed Bump

Taha Abbasi breaks down the January 2026 global EV sales data, and the numbers tell a story of divergence. According to Benchmark Mineral Intelligence, 1.2 million EVs were sold globally in January — but that represents a 3% year-over-year decline and a staggering 44% drop from December 2025.

The headline number masks dramatically different regional stories. Europe is surging, the US is stumbling, and China — the world’s largest EV market — is cooling after new taxes and weaker incentives took effect at the start of the year.

Europe: The Unexpected EV Champion

European EV sales continued their upward trajectory in January 2026, driven by tightening emissions regulations and aggressive manufacturer incentives. Countries like Norway, the Netherlands, and Germany continue to lead adoption, with EV market share exceeding 30% in several markets.

The European Commission’s emissions penalties for non-compliant automakers are forcing legacy manufacturers to push EV inventory aggressively, creating a buyer’s market with competitive pricing. As Taha Abbasi observes, regulatory pressure is doing what market forces alone could not — accelerating the transition at scale.

China: Post-Subsidy Reality Check

China’s EV market, which accounted for over 60% of global sales in 2025, faced its first significant headwind as new purchase taxes took effect and provincial subsidies expired. The result was a sharp pullback in consumer demand, particularly for lower-priced models from brands like BYD, NIO, and Xpeng.

This cooling was anticipated by industry analysts, but the severity — a double-digit percentage drop — surprised many. Taha Abbasi notes that this represents a normalization rather than a collapse. China’s EV infrastructure is now mature enough that long-term adoption trends remain firmly intact, even without the aggressive subsidy environment that characterized 2023-2025.

For more on the Chinese EV competitive landscape, see Taha Abbasi’s analysis of China’s EV dominance.

United States: Policy Uncertainty Takes Its Toll

US EV sales continued to underperform relative to global trends, with policy uncertainty under the current administration creating hesitation among both consumers and manufacturers. The rollback of EPA clean vehicle standards announced this week adds another layer of uncertainty to an already complex regulatory environment.

Despite these headwinds, Tesla continues to dominate the US market, with the Model Y remaining the best-selling EV by a wide margin. The Cybertruck has also carved out a significant niche in the full-size truck segment, demonstrating that demand for EVs remains strong when the product-market fit is right.

What This Means for the Industry

As Taha Abbasi sees it, the January 2026 slowdown is a recalibration, not a reversal. The fundamental economics of EVs — lower operating costs, improving range, expanding charging infrastructure — continue to favor electrification. What we are witnessing is the transition from subsidy-driven growth to market-driven growth, and that transition is inherently bumpy.

The companies that will thrive in this environment are those with vertical integration, software advantages, and manufacturing scale — which is why Tesla’s position remains uniquely strong despite the broader market softness.

Looking Ahead

February and March data will be critical in determining whether January was an anomaly or the start of a longer trend. With new models launching from Rivian (R2), Hyundai (IONIQ 9), and several Chinese manufacturers, the supply side is more competitive than ever. The question is whether demand can keep pace.

Taha Abbasi will continue tracking these trends as the year unfolds. The EV revolution is not in question — but the pace and regional distribution of that revolution is being reshaped in real time.

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About the Author: Taha Abbasi is a technology executive, CTO, and applied frontier tech builder. Read more on Grokpedia | YouTube: The Brown Cowboy | tahaabbasi.com