Arthur D. Little has released its 2026 Global e‑Mobility Readiness Index, delivering a thought‑provoking conclusion for the automotive industry: the capability to manufacture electric vehicles is no longer the key. What truly matters is whether the market is ready for electrification.

Covering 31 markets worldwide, the index evaluates performance across five dimensions: macro environment, market landscape, consumer willingness, charging infrastructure and total cost of ownership. The 100‑point threshold marks a critical dividing line — once crossed, EVs compete on an equal footing with internal‑combustion‑engine (ICE) vehicles.

Global Ranking: China and Norway Lead; Traditional Powerhouses US and Japan Lag Behind

Only two markets have broken the 100‑point barrier. China takes the global lead with 106 points, followed by Norway at 103 points. In both markets, the EV ecosystem has matured to such an extent that EVs do not merely compete with ICE vehicles but outperform them structurally.

Singapore (96 points) and the Netherlands (90 points) form the next tier. European markets including France, Germany, the United Kingdom, Austria, Sweden, Belgium, Italy and Spain follow. While equipped with solid fundamentals, they are constrained mainly by affordability.

Surprisingly, major traditional automotive powers rank much lower. The United States, the world’s second‑largest car market, sits at 25th place, while Japan is 23rd. Both fall into the mid‑to‑lower range in e‑mobility readiness.

Nicola Borgo, Automotive Practice Manager at Arthur D. Little, notes that leading markets have achieved success through distinct pathways:

• China’s model: Driven by the combination of massive market scale, a full‑fledged domestic EV industry and extensive charging infrastructure, bringing down costs to a level hard for ICE vehicles to match.
• Norway’s model: A prime example of consumer‑led adoption. EVs accounted for 97 % of new vehicle registrations in 2025. Instead of heavy industrial mandates, tax and usage‑related incentives encourage consumers to choose EVs of their own accord.
• The Netherlands’ model: A benchmark within the EU. High EV penetration together with dense urban charging networks creates a proven formula for highly‑urbanised markets.

These pathways are equally valid, yet share one core truth: electrification success hinges not on legacy automotive industrial heritage, but on the completeness of the overall ecosystem.

Europe: Slowdown Rather Than Derailment

Europe saw an electrification setback in 2024. The index interprets this as deceleration, not collapse.

“Affordability concerns, policy adjustments and uneven model supply have slowed European electrification — but not derailed it,” commented Borgo.

Germany serves as a representative case. The abrupt withdrawal of subsidies at the end of 2023 triggered a 27 % drop in EV sales in 2024. Sales rebounded by 43 % in 2025, supported by expanded charging networks, richer product portfolios and company‑car tax incentives. According to Dataforce, Germany’s EV market share rose from 13 % in 2024 to 19 % in 2025. France exceeded 20 %, and the Netherlands reached 40.3 %.

Another observation emerges: smaller markets often exhibit higher e‑mobility readiness. Nations such as Norway and the Netherlands leverage dense charging networks, operational incentives, high urbanisation, strong per‑capita GDP and high shares of renewable energy to build highly‑efficient EV ecosystems.

Why the US and Japan Are Falling Behind

The root causes for underperformance differ sharply between the two markets.

The United States suffers from policy volatility. Federal tax‑credit eligibility has become increasingly restrictive, while infrastructure roll‑out varies widely across states. Reduced tangible consumer incentives weigh on market demand. As Borgo puts it, the US market is held back by “tightening incentive criteria and inconsistent infrastructure deployment”.

Japan pursues a technology‑neutral approach, refraining from an exclusive focus on battery‑electric vehicles and maintaining policy support for hybrids and plug‑in hybrids. This grants domestic manufacturers more transitional breathing room, yet leaves its pure‑EV ecosystem lagging behind peers.

Emerging Markets: The Next Battleground

Emerging markets deliver some of the most noteworthy findings. Non‑traditional automotive markets are recording rapid EV uptake: Vietnam at 40 %, Thailand 23 %, and Türkiye 22.3 %.

Affordability remains the biggest barrier to mass EV adoption. This partly explains the rapid penetration of Chinese OEMs in Thailand, Indonesia and Brazil: Chinese vehicle cost structures align closely with price‑sensitive local demand. Home‑grown champions are also rising, such as Vietnam’s VinFast and Türkiye’s Togg.

Borgo believes Vietnam, Thailand and Brazil are still in early‑stage development. European automakers retain a once‑in‑a‑generation window to establish presence before competitive landscapes solidify. Southeast Asia and South America have long been Japanese strongholds, yet electrification is rewriting the competitive rules in these regions.

Chinese OEMs: Advantage Goes Beyond Products

The report carries critical takeaways for European carmakers: Chinese competitors’ strength lies not only in vehicles, but in operational models.

R&D cycle gaps are telling. Chinese OEMs can complete a new‑vehicle development cycle in roughly 24 months, compared with around 48 months for most European counterparts. Continuous user‑feedback collection and fast product iteration reshape industry competition dynamics.

European manufacturers have shifted their core question from “should we launch EVs in this segment?” to “how can we achieve acceptable profit margins?”.

Borgo advises European players to view China not only as a rival but as a reverse‑innovation engine. Renault’s new Twingo illustrates this new paradigm: developed in China but assembled in Europe, leveraging Chinese development speed and cost competitiveness for the European market.

The Rules of the Game Have Changed

“For e‑mobility, what counts is not merely market size, but market readiness,” Borgo emphasises. Competitive leadership is no longer defined by manufacturing scale, but by a holistic ecosystem covering charging infrastructure, policy incentives, total cost of ownership and regulatory frameworks.

Legacy automotive heavyweights like the US and Japan rank outside top‑20 in this new contest, while complete‑ecosystem markets such as China and Norway take the lead.

For European automakers, two implications stand out. In mature markets, competition has moved past “whether to offer EVs” toward “whether EV businesses can be profitable”. In emerging markets, brand heritage matters less than the ability to deliver vehicles with Chinese‑level cost efficiency and development speed.