Global electric vehicle (EV) sales surged to 1.6 million units in May 2025, bringing the total for the year to 7.2 million, marking a significant 28% increase from 2024.

China continues to dominate the EV market, achieving over 1 million sales in a single month for the second time this year, with total sales in May reaching 1.02 million.

In comparison, Europe sold 330,000 EVs, North America 160,000, and the rest of the world 150,000, highlighting the disparity in market growth.

However, the expiration of Canadian subsidies has negatively impacted North American demand for electric vehicles, contributing to a 20% sales drop in that region.

North America has only seen a modest 3% growth year-to-date, largely due to this pause in subsidies, while the U.S. experienced a 4% increase supported by federal tax credits.

These tax credits in the U.S. are set to start phasing out in 2026, creating uncertainty among potential buyers.

Global automakers are also facing a 25% import tariff in the U.S., prompting many to revise their sales outlooks for 2025.

Tesla's Model Y production in Berlin allows it to sidestep these tariffs, but it faces increasing competition as global production ramps up.

The gap between China's rapid EV market growth and North America's stagnation continues to widen, as noted by industry analyst Charles Lester.

In response to this competitive landscape, BYD, a Chinese automaker, is expanding into Europe with new budget-friendly battery electric vehicles, including the Dolphin Surf model.

Germany's new incentives for fleet buyers are expected to bolster electric car sales in Europe, where corporate vehicles make up over half of the auto market.

Overall, fleet incentives in Germany and strong growth in Southern Europe are positively impacting the electric vehicle market across the continent.