Global EVs got off to a weak start in 2026, with Europe and Rest of World growth offsetting declines in China and North America
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Global EVs got off to a weak start in 2026, with Europe and Rest of World growth offsetting declines in China and North America
Global passenger car xEV sales in February were 1.02 million, down 12% year over year, but Bernstein still expects EV sales to grow 14% in 2026 and believes long-term electrification and energy storage opportunities remain intact.
- Global passenger car xEV sales in February 2026 were 1.02 million, down 12% year over year and 13% month over month; year to date in 2026 sales reached 2.2 million, down 8% year over year.
- China EV sales in February were 469,000, down 31% year over year, mainly affected by subsidy cuts and changes to purchase tax incentives; North America sales were 87,000, down about 29%-30% year over year.
- Europe EV sales in February were about 309,000, up about 20%-21% year over year, while Rest of World sales were about 154,000-155,000, up 57% year over year.
- Passenger EV lithium battery demand in February was about 55-56 GWh, down 4% year over year, better than vehicle sales, reflecting cheaper batteries and larger per-vehicle capacity.
- CATL remained the leader, with February installations of 22.8 GWh, up 9% year over year and monthly market share of about 40.9%; BYD, LGES, Panasonic, and Samsung SDI showed mixed performance.
- Global LFP share fell to about 41%, but the share outside China rose from 14% to 23%, showing that LFP is expanding globally.
Report interpretation
Overview
This report is Bernstein's monthly tracking of the global EV and energy storage markets, with a core focus on February 2026 global passenger car xEV sales, regional demand, OEM sales, battery demand, chemistry mix, and trends in major markets such as India, Europe, China, and Japan. The report points out that the start of 2026 was weaker than expected, with both global EV sales and battery demand below full-year growth targets, but regional divergence is clear: Europe and Rest of World maintained strong growth, while China and North America came under pressure from subsidies, tax credits, and macro factors.
Core views
The core views are as follows: first, short-term global EV demand is slowing, but the long-term structural growth trend remains intact, and Bernstein still forecasts 14% EV sales growth in 2026, with xEV penetration rising to about 32%. Second, the Chinese market is entering a more mature stage, and subsidy cuts and purchase tax changes caused 2M26 demand to decline 25% year over year, but domestic EV sales in 2026 are still expected to grow about 5%-10%, with penetration rising to 61%. Third, US demand continues to decline after the removal of CVC incentives, while Europe and Rest of World are becoming the main growth supports. Fourth, battery demand is more resilient than vehicle sales, CATL and other leaders continue to gain share, and Korean battery companies remain under pressure in the near term. Fifth, after a strong 2025, energy storage still has opportunities in 2026, but expectations are higher and share-price upside may be less than in the prior year.
Analysis framework
The report uses a monthly data-tracking framework, broken down by global totals, regions, OEMs, vehicle models, power battery installations, chemistry mix, and key country markets. Data sources include registration and sales data from different countries and OEMs, updated with about a one-month lag. The China figures reflect retail vehicle registrations and exclude overseas exports.
Methodology notes
Track global passenger car electrification sales on a BEV plus PHEV basis
The report refers to BEV and PHEV collectively as xEV, and compares year over year, month over month, and year to date performance each month to judge whether global EV demand is in line with full-year growth expectations.
Use regional sales and share to explain the divergence in global demand
The report splits global EV sales into China, Europe, North America, and Rest of World, highlighting the offset between declines in China and North America and growth in Europe and other regions.
Use GWh installations, supplier share, and LFP/NMC mix to gauge battery supply chain trends
The report tracks not only vehicle sales but also lithium battery demand, major battery makers' share, and the LFP/NMC mix to identify changes in battery capacity, cost declines, and regional technology routes.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- CATL-ACore beneficiary in batteries and energy storage
- Strengths
- Leading market share, with February installations of 22.8 GWh and 9% year-over-year growth; broad product portfolio including LFP, M3P, sodium-ion, Qilin, and Shenxing; leading gross margin and returns.
- Weaknesses
- A near-term slowdown in global EV demand may affect installation growth, and industry competition remains intense.
- Comparison
- Compared with most battery makers, CATL has stronger share and a stronger technology roadmap, and the report views it as the most attractive energy storage stock.
- Risks
- EV demand below expectations, price competition, overseas market access, and policy risk.
- BYDOne of the global xEV sales leaders and a representative Chinese automaker
- Strengths
- Still ranked among the global OEM sales leaders in February with about 118,000 vehicles sold; strong electrification and vertical integration capabilities.
- Weaknesses
- Sales fell 47% year over year in February, with a clear impact from China subsidy rollbacks and a high base.
- Comparison
- Together with Tesla and Geely, it is one of the leading global OEMs by sales, but near-term domestic demand in China is under greater pressure.
- Risks
- Intensifying competition in China, subsidy changes, higher material costs, and export uncertainty.
- TeslaKey name in global BEV sales
- Strengths
- February sales were about 100,000 units, up 9% year over year; Model Y and Model 3 remain global best-selling BEVs.
- Weaknesses
- European sales fell sharply in 2025, and registrations in Europe for 2M26 were still down 1%; the product refresh cycle does not fully explain the weak performance.
- Comparison
- Performance recovered in some months in Germany, but Europe overall was weaker than the market's BEV growth.
- Risks
- European autonomous-driving regulation, product refresh timing, rising competition, and weak demand.
- LGES、Samsung SDI、LG ChemKorean battery makers
- Strengths
- LGES passenger vehicle battery sales were 6.8 GWh in February, up 6% year over year, tied to customers such as Tesla, VW, and Renault.
- Weaknesses
- Korean companies invested heavily in the US, but demand has not materialized, leading to insufficient utilization and operating losses; most capacity is nickel-based rather than LFP.
- Comparison
- Compared with Chinese battery companies, Korean makers face stronger price and technology-route competition in Europe and the US.
- Risks
- Insufficient US EV demand, erosion of European share by Chinese players, and lagging LFP transition.
- China auto OEM sectorThe main vehicle for China EV demand and export growth
- Strengths
- The long-term electrification trend remains intact, and domestic EV sales in 2026 are expected to grow about 5%-10%, while exports are expected to grow 10%-20%.
- Weaknesses
- Subsidy cuts, higher purchase tax, demand pull-forward in 2024-2025, a high base, and weak consumption are creating pressure.
- Comparison
- Domestic demand is weaker than Europe and Rest of World, but exports remain a source of growth.
- Risks
- Price wars, material cost inflation, weak macro demand, and overseas trade barriers.
- European auto OEMsAssets that benefit from or are pressured by Europe's BEV ramp-up and emissions regulation
- Strengths
- European EV sales in February grew about 20%-21% year over year, BEV penetration continued to rise, and products such as Mercedes' new CLA improved competitiveness.
- Weaknesses
- Some OEMs, such as VW, saw short-term declines in German BEV sales due to a high base, while Tesla's European performance remained weak.
- Comparison
- Overall European demand is significantly stronger than in China and North America, but performance varies widely by company.
- Risks
- Changes to emissions rules, promotional pressure, price competition, and swings in consumer demand.
- India EV supply chainAn emerging market electrification growth opportunity
- Strengths
- FY26 EV retail sales were about 2.45 million, up 25% year over year; e-2W and e-PV growth was strong.
- Weaknesses
- e4W penetration is still below 5%, and infrastructure, range anxiety, and perceptions of used-vehicle residual values limit mainstream adoption.
- Comparison
- India is in the transition from a niche market toward early mass adoption, with a steeper growth slope than mature markets.
- Risks
- Subsidy adjustments, insufficient charging infrastructure, and volatility in oil prices and the consumer cycle.
- European premium tire makersAuto parts beneficiaries of rising EV penetration
- Strengths
- EVs are heavier and have higher torque, requiring larger, more technically sophisticated tires, which supports demand for premium replacement tires.
- Weaknesses
- The slowdown in North America and China EVs is a mild headwind.
- Comparison
- Premium replacement tires are more profitable than OE channels, and a reacceleration in European EV demand is more favorable for tire makers.
- Risks
- Slower EV penetration, raw material costs, and the auto production cycle.
Key data
- Global passenger car xEV sales in February 20261.02MDown 12% year over year and 13% month over month.
- Global xEV sales year to date in 20262.2MDown 8% year over year, below Bernstein's full-year 14% growth forecast path.
- February BEV sales689KDown 12% year over year; down 6% year to date in 2026.
- February PHEV sales332KDown 12% year over year; down 10% year to date in 2026.
- China EV sales in February469KDown 31% year over year, accounting for 46% of global sales; 10.7 million year to date in 2026, down 25% year over year.
- Europe EV sales in February309KUp about 20%-21% year over year, accounting for 30% of global sales.
- North America EV sales in February87KDown about 29%-30% year over year, accounting for 8% of global sales.
- Rest of World EV sales in February154K-155KUp 57% year over year.
- Passenger EV lithium battery demand in February55-56GWhDown 4% year over year, better than vehicle sales.
- Passenger EV battery demand year to date in 2026118-119GWhUp about 1% year over year.
- CATL installations in February22.8GWhUp 9% year over year, monthly market share of about 40.9%, and year to date in 2026 share of about 41.8%.
- Global LFP share41%Down about 2 percentage points year over year and about 3 percentage points month over month; market share outside China rose from 14% to 23%.
- Global NMC share58%Above 56% in the same period last year.
- India FY26 EV retail salesAbout 2.45MUp 25% year over year, mainly driven by strong growth in e-2W and e-PV.
Impact & implications
In terms of investment implications, the report takes a differentiated view of the EV and energy storage supply chains. The short-term slowdown in demand weakens market confidence in the growth slope for early 2026, creating pressure especially on Chinese automakers and Korean battery makers with high US exposure, as well as on parts of the supply chain. But battery demand is more resilient than vehicle sales, energy storage remains a structural opportunity, and leaders with cost, scale, and technology advantages such as CATL are the main beneficiaries. Faster BEV growth in Europe, rising penetration of electric two-wheelers and passenger cars in India, the strength of Japanese HEVs, and demand for premium tires provide support for different regions and sub-sectors.
Risks
- A global economic slowdown could offset the potential boost to EV sales from rising fuel prices.
- China subsidy cuts, changes to purchase tax incentives, and demand pull-forward may continue to weigh on 2026 sales.
- After the removal of US CVC incentives, demand continues to decline, affecting North American EV and battery utilization rates.
- Korean battery companies have made heavy investments in the US, but demand has not materialized sufficiently, which may lead to operating losses and idle capacity.
- Chinese battery makers' accelerated entry into Europe may intensify price competition and squeeze Korean makers' share.
- Material cost inflation, vehicle price wars, and weak macro consumption may compress margins in vehicles and the supply chain.
- Changes to European emissions rules and the 2035 ICE policy could alter OEM electrification pacing.
- The adoption of e4Ws in India remains constrained by charging infrastructure, range anxiety, and residual value perceptions.
What to watch
- Whether rising fuel prices can reaccelerate EV sales in subsequent 2026 months.
- The pace of recovery in China's EV retail sales after subsidy rollbacks and purchase tax changes.
- Whether US EV demand continues to fall after incentive removal, and the impact on Korean battery makers' utilization rates.
- Whether Europe can maintain strong BEV growth, especially the performance of VW, Mercedes, BMW, Tesla, and other brands.
- Monthly installation share changes for CATL, BYD, LGES, Samsung SDI, and other battery makers.
- The speed of LFP penetration outside China, and changes in the shares of NMC and LFP.
- Whether the rise in India's e-2W and e4W penetration continues.
- Whether energy storage demand continues to exceed expectations in 2026, and the impact of a lithium price recovery on upstream companies such as Tianqi.