EVs Are Accelerating Globally—But 2026 Will Be a Reset Year for the US

In 2025, the global EV story and the US EV story quietly diverged. Worldwide, EV sales are still hitting record highs, led by China and Europe. In the US, the market is entering a policy and product reset that will make 2026 a pivotal year.

5 things to watch in EVs in 2026

1. Global growth, local reset

   EVs continue to grow globally as more affordable, compact models enter the market and infrastructure improves. China and Europe are still moving steadily up the adoption curve. The US, by contrast, is shifting into a reset: growth is slowing, not collapsing, and strategy is moving from “grow at any cost” toward “grow where the economics and customer need line up.”

   
   

2. The phase‑out of US federal EV tax credits

   The phase‑out of federal tax credits for new and used EVs by late 2025 removes a powerful price lever just as the market was moving from early adopters to the mainstream.Expect more emphasis on automaker and dealer incentives, leasing, and creative packaging to maintain perceived value without that headline credit.

   
   

3. Relaxed regulations and less pressure to push EV volume

   With fuel‑economy and related rules being softened, automakers face less regulatory pressure to force unprofitable EV volume into the market. That shift will accelerate the pivot toward more profitable hybrids and efficient ICE vehicles, and it will force EV programs to stand on clearer customer and business cases.

   
   

4. The pause on big EV trucks as the hero

   US OEMs leaned heavily into large electric trucks and SUVs as EV flagships. Now, some of those programs are being slowed, reshaped, or discontinued, while hybrids and extended‑range solutions gain share. At the same time, Tesla’s success with Model 3 and Model Y shows there is strong US demand for right‑sized, mainstream EVs when price, range, and experience are dialed in.

   
   

5. From “EV vs ICE” to portfolio thinking

   The conversation is shifting from “EVs replacing everything” to “what propulsion mix makes sense, for whom, and when.” The winners will be brands that treat EVs, hybrids, and ICE as a coherent portfolio: segmenting precisely, pricing intelligently, and telling a clear story about where each option truly wins.

So where does that leave us?

EVs are still growing worldwide, led by markets that have doubled down on smaller, more affordable models and consistent policy. The US is entering a reset, with incentives rolling off and regulations easing, which will slow near‑term adoption and push more focus onto hybrids and profitable ICE.