The year 2025 was a significant one for plug-in vehicles, with sales of battery-electric and plug-in hybrid cars increasing worldwide. According to a report from Benchmark Mineral Intelligence, a total of 20.7 million units were sold, representing a 20% growth compared to the previous year. However, this growth was not uniform across all regions, with North America experiencing a decline in plug-in vehicle sales.
In North America, specifically the United States and Canada, plug-in vehicle sales fell by 4% in 2025. This decline can be attributed to the elimination of the $7,500 federal tax credit in the U.S., which had previously incentivized the purchase of electric vehicles. The absence of EV incentive programs in both countries slowed down sales, with Canada also experiencing a 41% decline in plug-in sales due to the exhaustion of its federal rebate program.
Conversely, other regions experienced significant growth in plug-in vehicle sales. The “rest of the world” category, which includes regions like South America, Southeast Asia, and Central Asia, saw a 48% increase in sales. Europe also recorded a 33% growth in plug-in sales, with China making a substantial contribution to Europe’s electrified vehicle market.
China, a key player in the global electric vehicle market, showed signs of a slowdown in plug-in vehicle growth in 2025. Despite this, the country still saw a 17% increase in plug-in sales, reaching 12.9 million units. Chinese manufacturers like BYD, SAIC, Xpeng, and Leapmotor made significant inroads into the European market, with around 19% of all electrified vehicles sold in Europe coming from China.
Looking ahead, the future of plug-in vehicle sales in North America remains uncertain. Benchmark Mineral Intelligence projects a further decline of 29% in U.S. plug-in sales in 2026, citing limited consumer incentives and a lack of supportive legislation. However, some states, such as California, have announced plans to introduce their own EV buying incentives to mitigate the impact of the federal tax credit elimination.
Overall, the global plug-in vehicle market is evolving rapidly, with growth shifting towards regions like Europe and the “rest of the world.” While challenges remain in North America, the momentum towards electric and electrified vehicles is expected to continue in the coming years. Electric vehicle (EV) sales continue to rise globally, with pure EV sales increasing by 26% in 2025. However, plug-in hybrid sales only saw a modest 6% increase. This growth trend was observed throughout the year, but pure EV sales appeared to slow down toward the end of the year, with fourth-quarter numbers only up by 4% compared to the same period in 2024.
In China, where plug-in vehicles are known as “new energy vehicles” (NEVs), sales were previously exempt from purchase taxes. However, in 2026, this exemption was partially removed, leading to a decrease in incentives for buyers. With buyers now required to cover 50% of the sales tax, the market is expected to slow down further. Additionally, NEVs were deprioritized in China’s next five-year plan, indicating a shift in focus away from the EV industry.
Meanwhile, in Japan, EV adoption remains sluggish, with the country’s plug-in market growing by only 6% in 2025. In contrast, South Korea experienced a 50% increase in plug-in vehicle sales, driven by the introduction of new models from Hyundai and Kia, as well as a comprehensive incentives program.
Despite challenges in key markets such as China and Japan, global demand for EVs remains strong. Consumers worldwide are increasingly opting for electric vehicles, signaling a shift towards sustainable transportation options. As governments continue to implement policies to promote EV adoption and reduce emissions, the future looks promising for the electric vehicle industry.