New data from Benchmark Mineral Intelligence shows that the global electric vehicle (EV) market fractured along regional lines in early 2026.
While global sales reached 5.6 million passenger EVs through April — a modest 6 percent year-on-year increase — that headline number masks a stark divergence.
“It’s very different on a regional basis,” Charles Lester, data manager at Benchmark, told the Investing News Network during a recent podcast interview. “Europe and the rest of world are growing very strong. Meanwhile, we’ve got reductions in 2026 year-on-year in China and North America.”
China, long the world’s EV engine, is down roughly 17 percent year-to-date.
The driving force is a revamped trade-in subsidy scheme that now favors larger vehicles, plus the first-ever purchase tax on EVs. Smaller, cheaper EVs — a staple in China — have taken the hardest hit.
Ironically, battery demand hasn’t suffered as much.
“Most of the vehicles are now larger. They’ve got larger pack sizes,” Lester explained.
Europe’s surprise acceleration
Europe tells an opposite story.
After record sales in March, growth accelerated to 30 percent year-on-year in March and April.
Three forces are at work, according to Lester: tightened emissions legislation averaging across the 2025 to 2027 period; renewed subsidy programs in Germany, the UK and Italy; and — perhaps most unexpectedly — the conflict in the Middle East. In addition, rising petrol prices have pushed European consumers to bring forward EV purchases.
“Consumers are definitely putting forward purchases because of the impact on actual prices across the world,” he explained during the interview.
Chinese exports change the game
While western automakers struggle with EV profitability, Chinese original equipment manufacturers are flooding global markets. China recorded over 400,000 EV exports in April alone, targeting Europe, Southeast Asia and Latin America. Even with European tariffs in place, Chinese-built vehicles captured 22 percent of Europe’s EV market in early 2026, up from 19 percent in 2025.
“BYD (OTCPL:BYDDF) definitely finds it more profitable to sell to the European market at a higher price than in the domestic market,” Lester said. “They’re clearly still making good money there.”
Mexico’s response, a 50 percent tariff introduced in early 2026, hasn’t stopped the flow. Chinese exporters simply flooded the market before the tariff took effect.
North America lags
In the US, tax credit eliminations and the effective zeroing out of CAFE standard fines have removed incentives for automakers to push EVs, especially when hybrids remain profitable.
Meanwhile, Canada’s new subsidy scheme and a limited quota of 49,000 Chinese EV imports may provide a modest lift, but not a dramatic one.
Lester pointed investors toward three key variables: the duration of elevated petrol prices from Middle East tensions, protectionist moves in Europe and the US aimed at onshoring battery supply chains and the continued rise of lower-cost LFP battery chemistry, already dominant globally, but facing a slight market share dip in China due to the shift toward larger vehicles.
“One of the big stories of this year,” Lester says, “is that China has maintained strong production. The domestic market is down a bit, but exports have exploded.”
For more insights into the global EV market, listen to the full conversation with Benchmark’s Lester above.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
