Global EV sales surge 24% in June, but US market faces headwinds

Global sales of electric and plug-in hybrid vehicles surged 24 per cent in June compared to the same period last year, reflecting strong momentum in China and Europe, according to market research firm Rho Motion. However, US sales experienced a slight decline, down 1 per cent, and experts suggest that the US market could face challenges in the latter half of 2025. June saw a dramatic rise in global electric vehicle (EV) sales, with 1.8 million units sold globally. The growth was largely driven by strong demand in China, where sales jumped 28 per cent to 1.11 million vehicles. Europe also saw impressive growth, with sales increasing 23 per cent to about 390,000 units.

The rest of the world, including emerging markets, experienced a 43 per cent increase, outpacing North America for the first time. However, North American sales fell by 9 per cent, with the US specifically reporting a slight dip in sales. The increase in global sales is seen as part of the ongoing shift to electric mobility, particularly in regions where government incentives, growing EV infrastructure, and increased availability of affordable electric cars are boosting consumer confidence. In China, while some cities have run out of subsidies, the government is expected to introduce more incentives in the second half of the year, potentially leading to a surge in sales as the year progresses.

US EV market faces challenges ahead

Despite strong global performance, the outlook for the US EV market remains uncertain. A combination of factors, including reduced government-backed tax incentives and rising economic pressures, has led to a slower-than-expected adoption of EVs in the US.

According to Cox Automotive, EV sales in the US saw a decline of 6.3 per cent year-over-year in Q2 2025. The total number of new EVs sold in the US during this period was 310,839, down from 331,853 in the same quarter last year. Although sales were up 4.9 per cent compared to Q1, the decline in Q2 is seen as a sign of a more mature market, where growth may ebb and flow depending on consumer demand and government incentives.

In addition to the fading tax incentives for new EV purchases—set to phase out in October—Cox Automotive forecasts that the second half of 2025 will likely see a slowdown, especially in Q4, when the full impact of the incentive cuts will be felt. The shift in government policy, combined with rising inflation and supply chain constraints, is expected to test consumer appetite for EVs.

Q3 Outlook: A critical period for US EV market

Looking ahead to the third quarter, Cox Automotive predicts that the US EV market will experience a short-term boost due to a rush to purchase before the phase-out of federal tax incentives. However, this growth is expected to be temporary, and the market will likely face significant challenges in Q4. “The second half of the year will be a critical test of EV demand,” said Stephanie Valdez Streaty, senior analyst at Cox Automotive.

In contrast to the US, the Chinese EV market remains strong, with more than 3 million vehicles sold in the first half of 2025, and exports continuing to grow. The global shift toward electric mobility is clearly underway, but the US market, burdened by policy changes and economic pressures, may struggle to keep pace with other regions. As global automakers adjust to these shifting dynamics, the US EV market’s ability to maintain growth will depend heavily on how quickly manufacturers and consumers can adapt to the new reality.