Is the internal combustion engine finally losing its grip? New data reveals a surprising twist.
While many Western analysts predicted a slowdown in electric vehicle (EV) adoption due to subsidy cuts and trade tensions, the latest data from Benchmark Mineral Intelligence (BMI) tells a different story. In April 2025, global registrations of battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) climbed 6% year-on-year to 1.6 million units. The surprising driver? Persistent high gasoline prices and a strategic pivot in policy incentives are keeping EV demand afloat, even as China’s domestic market faces a temporary dip.
Key Market Breakdown: Winners and Losers
The global EV market is increasingly fragmented, with stark regional contrasts. Here’s what the BMI data reveals:
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China: Domestic registrations fell 8% year-on-year to ~850,000 units, as vehicle trade-in subsidies expired and purchase tax breaks ended. However, Chinese OEMs doubled down on exports, shipping over 400,000 EVs in April alone. In the first four months of 2025, total new energy vehicle (NEV) exports hit nearly 1.4 million units—more than double the previous year.
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Europe: Registrations surged 27% to ~400,000 units, boosted by a collective €200 billion ($235 billion) investment pledge from European Economic Area countries and Switzerland to build out EV infrastructure. Notably, Chinese-made EVs captured 22% of the European market in Q1 2025, up from 19% a year earlier, despite EU tariff hikes.
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North America: The U.S. saw a 28% drop in EV registrations to 120,000 units, as federal tax credits expired and the Trump administration signaled a rollback of emissions rules. Mexico bucked the trend with a 50% jump in EV sales, while Canada posted a 7% decline but is expected to rebound with new incentives.
Why This Matters to Western Investors and Analysts
This data challenges the narrative that EV adoption is stalling. Instead, it reveals a structural shift driven by three factors:
1. Gasoline Prices as an Accelerator
Middle East tensions disrupting oil shipping routes have kept gasoline prices elevated globally. BMI notes that this continues to push cost-conscious consumers toward EVs, even where subsidies are fading. For Western investors, this suggests that oil price volatility is now a structural tailwind for EV demand, not just a temporary blip.
2. China’s Export Machine Is Unstoppable
Despite a domestic slowdown, Chinese OEMs like BYD, SAIC, and Geely are aggressively expanding overseas. With 22% of European EV sales now Chinese-made, Western Tier 1 suppliers face mounting competitive pressure. As we noted in our analysis of Chinese EV export strategy, this trend is reshaping global supply chains.
3. Policy Divergence Creates Risk and Opportunity
The U.S. retreat from EV incentives contrasts sharply with Europe’s massive infrastructure investments and China’s export push. For portfolio managers, this means regional allocation is critical: European EV stocks and battery supply chains may outperform, while U.S.-focused plays face headwinds.
What’s Next? Three Trends to Watch
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Battery Cost Parity: With lithium prices stabilizing and LFP battery production scaling in China, the cost gap between EVs and ICE vehicles is narrowing. This could sustain demand even without subsidies.
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Tariff Escalation: The EU’s anti-subsidy investigation into Chinese EVs may lead to higher tariffs by late 2025. How Chinese OEMs respond—by localizing production or pivoting to Southeast Asia—will be key.
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ADAS Regulation: China’s push for standardized L2 ADAS could make its EVs even more attractive in price-sensitive markets, as we explored in our deep dive on ADAS standards.
The Bottom Line
The April data confirms that the global EV transition is alive and well, but it is increasingly a two-speed market: China and Europe are accelerating, while the U.S. is stalling. For investors and industry professionals, the message is clear: ignore Chinese EV exports and European policy momentum at your own peril. The ‘China information gap’ is no longer just a language barrier—it’s a competitive disadvantage.