In the first half of 2026, the share of pure gasoline vehicles in global new car sales dropped to 49%, dipping below the 50% threshold for the first time. Just five years ago in 2021, the figure stood at 73%, representing a 24-percentage-point decline. The automotive industry is undergoing profound structural reorganization over this period.

Divergent Regional Electrification Paths

Per IEA definitions, electric vehicles include battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs). Regional markets showed stark divergence in H1 2026. In 31 major European countries, EV sales surged by 32% and surpassed gasoline car sales for the first time. Southeast Asia recorded an 81% jump in EV sales, while Oceania more than doubled its EV volume.

By contrast, China’s domestic EV sales edged down 3% to 3.44 million units. North America saw a 15% EV sales decline, mainly due to phased-out US subsidies. Meanwhile, global sales of conventional hybrid electric vehicles (HEVs) rose by 10% to 7.27 million units.

The shrinking gasoline vehicle share stems from multiple technology routes. BEVs and PHEVs drive growth in Europe and Southeast Asia, while HEVs offer a smoother transition pathway worldwide. High oil prices acted as a trigger, yet policies, new model supply and charging infrastructure determine the pace of electrification.

Chinese Automakers: Core Contributors to Global Electrification

Chinese OEMs occupy a prominent position amid this global electrification wave. IEA data shows Chinese automakers account for 60% of total global BEV and PHEV sales. Among EVs and PHEVs sold outside China, the US and Europe, 55% are imported from China.

Exports are evolving from simple vehicle sales to system-building. Geely exported 474,000 vehicles overseas in H1, up 158% year-on-year. BYD delivered 789,400 vehicles internationally, a 70.65% YoY increase. Still, it should be noted that the falling global gasoline car share is not entirely attributed to Chinese BEVs; HEVs and local overseas new-energy models also play vital roles.

Foreign Carmakers: Partnering with Chinese Technology While Tapping Brakes on In-house EV Development

Global automakers are adopting a seemingly contradictory dual strategy.

On one hand, foreign players are deepening technical partnerships with Chinese enterprises. UBS statistics indicate that since 2018, European OEMs including Volkswagen, Stellantis, Mercedes-Benz and BMW have established technical cooperation with at least 38 Chinese firms and research institutions.

• Stellantis partners with Leapmotor for local production in Europe, manufacturing the Leapmotor B10 and a jointly developed SUV in Spain.
• Chery and Jaguar Land Rover unveiled the FREELANDER. Chinese side leads product definition and R&D, while JLR contributes branding and global market channels.

This is not a reversal of the “market-for-technology” model but mutually beneficial collaboration. Foreign brands bring established branding, sales networks and manufacturing bases; Chinese partners supply EV platforms, battery-electric systems and intelligent software. Stellantis CEO Carlos Tavares commented such partnerships help boost sales, absorb Chinese technology and spread capital expenditure — a pragmatic choice amid poor returns on in-house EV investment.

On the other hand, more than ten global OEMs including Honda, Ford, General Motors, premium German brands, Porsche and Volkswagen have delayed or scaled back their EV plans, with combined losses of roughly 500 billion RMB.

• Honda cancelled three North American BEV models and is set to post its first annual loss in nearly 70 years.
• Toyota halted mass production development of Lexus flagship BEV sedan LF-ZC.
• Volkswagen’s operating profit plunged 54% in FY2025. The group is pushing for global layoffs of 50,000 employees and plans to cut capacity by 3 million units.

The underlying logic is clear. BEV demand growth in North America fell short after subsidy cuts, and charging infrastructure varies widely across Europe. Updated HEVs and revised gasoline models can well address high oil price pressure. Rather than pouring continuous capital into risky in-house BEV projects with uncertain returns, OEMs are shifting toward more profitable solutions.

“Adopting Chinese technology” and “slowing proprietary EV R&D” are not conflicting but differentiated strategies for separate markets. Adopting Chinese technology secures survival in China: foreign brands’ market share in China tumbled from 64% in 2020 to 32%. Volkswagen delivered merely 9,400 BEVs in China in Q1 2026, a steep 63.8% YoY drop. Slowing in-house EV development safeguards profitability globally and mitigates risks in overseas BEV markets. For instance, Volkswagen launches EVs integrated with Chinese software and chips for China, while trimming its global BEV lineup, leveraging partnerships to hedge electrification uncertainties.

The Final Outcome Remains Uncertain

Gasoline vehicles falling below 50% market share marks a milestone for the auto industry, yet it does not signal linear full replacement by EVs. EV penetration is highly sensitive to policies and energy prices, and market segmentation among BEVs, PHEVs and HEVs will persist.

Strategic swings among global automakers prove the final landscape of automotive electrification is far from settled. The core focus ahead is not which technology replaces another, but cross-border technology flows, reshaped industrial partnerships and divergent electrification timelines across global regions.