Across 2025 and 2026, impairment charges and downward revisions to EV targets fueled a narrative of an "EV winter" and "demand collapse." But the macro data points to something else. The excess hype has worn off, and the market has moved into a real-demand, cruising-speed phase. And it has not slowed uniformly — it is bifurcating by region.
According to the IEA's Global EV Outlook 2025, global electric car sales topped 17 million in 2024, up more than 25% year-on-year. Their share of new-car sales exceeded 20%. Those are not numbers consistent with "collapse." What matters is that this growth is happening at very different speeds across regions.
China and Emerging Markets Lead; Europe Plateaus
By region, the market splits into three distinct movements.
China: about half of new cars
Electric car sales exceeded 11 million — more than total global sales just two years earlier. Nearly half of new cars sold are now electric, and roughly one in ten cars on the road is electric. Price competition and a deep domestic supply chain underpin adoption.
Emerging markets: a record ~40% jump
Outside the three major markets of China, Europe, and the US, sales surged about 40% to 1.3 million. Far smaller than the US (1.6 million total new cars), but the fastest growth rate. Low-cost Chinese models are becoming the entry point for adoption.
Europe: flat as subsidies shrink
With subsidies phased down or removed in several major countries, 2024 sales turned flat. Yet the share held around 20% as gains in some countries offset declines in others — an adjustment driven by policy reaction rather than demand collapse.
In the US, sales kept rising, but the growth rate slowed to about a quarter of the previous year's. In other words, the word "slowdown" applies mainly to parts of the West where subsidy policy changed — not to the world as a whole.
Separating the "Slowdown" Narrative from Accounting Impairments
OEM impairment charges are often cited as evidence for "the EV is unnecessary" case. But an impairment is an accounting reassessment tied to revised future cash flows, and it follows a different logic from near-term unit sales. If investment timing ran ahead of the demand ramp, impairments can occur even while sales are rising.
A rush of demand just before a subsidy cut, followed by a payback drop the next period, is also easily confused with a "structural demand decline." Telling the two apart requires checking indicators such as inventory days and the normalization of discounting against unit sales.
Indicators for Tracking Bifurcation
The view that the market is bifurcating can be tested in a falsifiable way. Tracking the following indicators by region helps distinguish a "shift to a real-demand phase" from a "structural demand decline."
Signals that support the thesis
Global BEV+PHEV sales keep growing year-on-year; the electric share of new cars trends upward; China and emerging markets gain share. As long as these hold, the market overall can be read as moving into a real-demand phase.
Signals that break the thesis
BEV share in major Western markets falls year-on-year for several quarters and declines in absolute terms; rising inventory days and normalized discounting occur together. If these align, it is a sign of structural — not cyclical — demand decline, and warrants caution.
For procurement and business planning, it is more useful to assume "which regions and which price bands will grow" than the binary "will EV grow or not." China and emerging markets versus Western regulated markets demand different vehicle classes, prices, and supply-chain configurations. A demand forecast that lumps the market together will lack precision under bifurcation.
China's price competition and exports are covered in China NEV: Price War Cools as Exports Surge, and the battery economics behind adoption in Battery at USD 108/kWh: The BEV Cost Crossover.
Reference FactCards
> Source: IEA, Global EV Outlook 2025 (trends in electric car markets / executive summary). Regional sales and shares are based on the report's 2024 actuals.