Analysts warn over 50 smaller EV makers could face closure, consolidation, or downsizing in 2026. Global electric vehicle sales growth in 2026 is expected to fall to its lowest level since the COVID-19 pandemic disrupted the global economy in 2020, according to a report by the Financial Times on Jan. 4. Research firm Benchmark Mineral Intelligence forecasts that global EV sales will rise by just 13% in 2026 to around 24 million units, well below the estimated 22% growth rate for 2025. Industry executives and analysts said factors such as the Trump administration’s rollback of electric vehicle tax incentives and the European Union’s decision to ease its planned 2035 ban on internal combustion engine vehicles are reshaping the sector’s outlook. EU eases 2035 combustion engine ban In addition, China’s decision to shift from a full exemption of purchase tax on new energy vehicles to a 50% reduction starting in 2026 is expected to weigh on demand in price-sensitive segments of the market. Benchmark Mineral Intelligence also projects that EV sales in the United States will fall 29% to 1.1 million units this year, after reaching a record 1.5 million units in 2025. In Europe, EV sales growth is forecast to slow to 14% this year, reaching 4.9 million units, following an estimated 33% increase in 2025. China, the world’s largest electric vehicle market, is expected to see sales rise from 13.3 million units in 2025 to 15.5 million units, representing growth of 17%. China’s NEV sales from 2023 to 2025 While still expanding, the pace would be significantly lower than the rapid growth seen between 2020 and 2025. The Benchmark Mineral Intelligence report also noted that industry executives broadly expect continued growth in hybrid and plug-in hybrid vehicle sales. Insufficient charging infrastructure has deterred some consumers from purchasing battery electric vehicles, while hybrids are gaining popularity as a more practical alternative. Industry polarization is becoming increasingly pronounced, with leading players continuing to expand on the back of technological and scale advantages. BYD overtook Tesla in full-year sales last year, becoming the world’s largest electric vehicle manufacturer in 2025. BYD and Tesla’s global EV sales from 2021 to 2025 By contrast, smaller automakers may be caught in a dilemma of selling at a loss through price cuts or facing stagnating demand if prices are held firm. Combined with cost pressures such as a doubling of lithium carbonate prices, industry profit margins are being steadily squeezed. Market participants widely expect that more than 50 EV makers lacking core competitiveness could face shutdowns, mergers, or scaled-back operations in 2026.