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Judging the health of EV sales by the state of western markets misses the full picture. Western carmakers should also worry about the silent currents across the rest of the world.
Last year Luca de Meo took me aside at the Geneva motor show to explain his vision for Europe’s automotive future. The Renault CEO assured this environmental advocate that smaller, more affordable electric cars, like the Renault 5, would revive the fortunes of European carmakers. Fast forward 16 months, and the outlook for the west’s auto industries has darkened further while de Meo is ditching cars for luxury goods, a sector where Europe still rules the roost.
What stymied the hoped-for revival? On the back of Trump’s erratic tariffs and the withdrawal of EV tax credits, electric car sales have slumped in the US and the turmoil is hitting carmakers’ bottom lines.
In both the EU and the UK the car industry is asking for the previously agreed EV targets to be reversed. The European Commission has already agreed to delay its 2025 target by two years, with the fate of the 2035 engine phase-out up for debate after the summer.
Add to this the resurgence of hybrid cars – growing faster than battery electric vehicles in some markets – and you might be forgiven for thinking that western carmakers are right to pump the brakes on EVs.
But this would be a big mistake.
Globally, electric car sales are on a steady rise, growing by more than a third in the first quarter of 2025. The models coming on the market boast ultra-fast charging, longer ranges and state-of-the-art software while costing drivers less and less.
Nowhere is this more prominent than in China, the largest car market globally. The sales of all types of plug-in cars have now overtaken petrols. Every third car sold in China in May was battery electric, making this the most popular powertrain in the country.
But China is not an outlier. Following an expected dip due to the absence of EU targets last year, EV sales are also ticking up across Europe, registering a 26% increase in the first quarter of 2025. This is the result of carmakers finally starting to bring affordable models priced under €25,000 to comply with the stricter 2025 emissions standard. The introduction of the Renault 5 boosted the carmaker’s sales by over 80% following its introduction late last year.
Crucially, judging the health of EV sales by the state of these markets misses the full picture. Western carmakers should also worry about the silent currents across the rest of the world.
A less reported but more consequential race for the automotive future is happening in the larger emerging car markets of Asia Pacific, Africa and Latin America. There, cheap Chinese electric cars are fast eroding western carmakers’ market share.
EV sales shares in Thailand and Ethiopia are already above many European countries. EV sales in Brazil, which buys nearly as many cars as Germany, surged 90% last year, while they more than doubled in Indonesia.
T&E estimates that Chinese players have already taken half of the EV market in Africa and the Middle East (compared to just 15% in the overall car market). After decades as a stronghold for the likes of VW, many European auto executives complain in private meetings that they are fast losing the South African market.
Once dominated by Japanese and South Korean carmakers, at least 30% of the EV market in the Asia Pacific region (outside China) has now been captured by Chinese brands. And once a stronghold for the likes of Renault and Fiat, a whopping 80% of South American EV sales now comes from the Chinese.
This is not due to changing political or consumer preferences. The lesson is that consumers will flock to electric cars when good, competitively priced models are available. The problem is that western carmakers have little to offer to aspiring drivers in the Global South right now. Unhelpful policy rollbacks in the EU, UK and the US risk pushing them further behind.
Which brings us back to the French carmaker which de Meo turned around and led to record profits. With hardly any US sales and no presence in China, Renault is likely to remain a mid-level player globally. Other European car manufacturers may have to resign themselves to a similar status if they fail to bring the models drivers in emerging markets want to buy.
