Bernstein: EV Tracker — January 2026: EV Sales Enter the Slow Lane
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Global passenger xEV sales, encompassing both battery electric and plug-in hybrid vehicles, reached 1.17 million units in January 2026, representing a 4% year-over-year decline and a 45% sequential drop. Bernstein notes that China accounted for 51% of global volume, Europe 26%, and North America 7%. The brokerage projects full-year 2026 EV sales growth of 14%, with xEV penetration reaching approximately 32%, up from 28% in 2025.
The January decline was primarily driven by policy shifts. Chinese EV sales fell 20% year-over-year due to subsidy reductions, while the US market plummeted 30% following the elimination of CVC incentives. Conversely, Europe and the rest of the world demonstrated robust growth, surging 20% and 95%, respectively.
Battery demand grew 6% to 63 GWh, outpacing the broader decline in vehicle sales due to increasing average battery capacities. CATL maintained its industry leadership with a 44% market share, delivering 27.6 GWh. BYD and LG Energy Solution held 14.9% and 7.4% shares, respectively. LFP battery technology continued to gain ground, capturing 44% of the global market.
Bernstein maintains a cautious stance on Korean battery manufacturers, anticipating continued challenges over the next six to twelve months due to soft US demand and low capacity utilization. The firm expects the Chinese auto industry to face near-term headwinds from subsidy rollbacks and higher purchase taxes, though long-term electrification growth and export expansion remain intact.