EV Market Hits Speed Bump: China Sales Slide 20%, US Sees Worst Month Since 2022

Global EV Sales Overview - Global electric vehicle sales in January 2026 reached 1.2 million units, marking a 3% decrease year-over-year and a 44% drop from December 2025 [2] - The decline in sales is largely attributed to a significant downturn in the Chinese market, which is the largest EV market globally [1][4] Regional Performance - North America faced a challenging start to 2026, with EV sales dropping 33% year-over-year, marking the lowest monthly sales since early 2022 due to the expiration of federal EV tax credits [3][7] - In contrast, Europe demonstrated resilience with over 320,000 EVs sold in January, a 24% increase year-over-year despite a 33% decline from December [6] China's Market Dynamics - In China, EV sales fell 20% year-over-year and 55% from December, driven by new policies including a 5% purchase tax on EVs and changes to trade-in schemes [4] - The policy changes have contributed to a more market-driven environment for China's EV sector in 2026, following a challenging year for Tesla in 2025 [5] Emerging Markets - Outside major regions, EV sales nearly doubled in countries like South Korea, Brazil, and Thailand, indicating growth potential in these markets [6]