Despite a common perception to the contrary, electric vehicle (EV) sales continue to rise in certain global markets, including Mexico. While many consumers remain hesitant about switching to EVs, market dynamics are proving surprisingly resilient.
Europe has largely dictated automotive trends since the 1970s, following a decline in the quality of American vehicles and the expansion of Japanese automakers. European manufacturers championed diesel technology from the 1990s until 2015, when the “dieselgate” scandal—involving Volkswagen’s installation of emissions-cheating software—came to light. Following the scandal, Volkswagen began transitioning to electric vehicles, a move quickly adopted across the continent. A decade later, EVs account for just over 17% of the European market. Sales increased by 30% with Norway leading the way at 96% EV market share, and Spain experiencing the largest growth last year, with a 77% increase in EV registrations.
Across Europe, incentives to purchase EVs are coupled with increasing restrictions on internal combustion engine (ICE) vehicles. In Spain, some central streets are off-limits to ICE vehicles, and parking restrictions are in place, particularly during environmental contingencies. In Norway, ICE vehicles are roughly double the price of EVs due to taxation, while EVs are exempt from value-added tax (VAT), benefit from 50% toll reductions, and have access to dedicated lanes and parking. France recently introduced an emissions tax that effectively increases the price of a Toyota Yaris GR—which retails for around €51,000—by an additional €81,000 in taxes alone. A Yaris GR in France now costs €132,000, equivalent to approximately three million pesos.
China and the United States
China, the world’s largest automobile producer, saw more than half of its market comprised of pure EVs in 2025. Whereas, in January 2026, following the reduction of government incentives, the EV market experienced a 14% decline. This suggests that consumer purchases are largely driven by affordability rather than a preference for EVs.
In emerging markets, particularly those open to Chinese manufacturers like Mexico, EV sales are growing. Supported by limited incentives—such as daily access to Mexico City (which represents 33% of the national market), exemption from vehicle ownership tax and ISAN, and perpetual exemption from emissions verification—sales are concentrated among those seeking the latest technology or those looking to offset the higher upfront investment with fuel savings, such as taxi and ride-sharing services. In 2025, 17,332 EVs were sold in Mexico, representing just over 1% of the market. Sales are expected to increase this year, at least during the first half, with the arrival of new, relatively low-priced Chinese subcompacts. However, prices are likely to rise in the second half of the year as imported inventory from 2025—acquired to avoid new tariffs implemented in January—is depleted.
In the U.S., the market for EVs appears to have reached its peak, accounting for between 7% and 8% of total vehicle sales. This trend has been further reinforced by the recent easing of emissions controls by the U.S. Government, signaling a potential resurgence in demand for V8 engines. The shift in policy underscores a broader debate about the environmental impact of EVs. The author believes that the only way for the West to counter China’s expansion is to further develop ICE technology, as China is no longer investing in it. While China is unlikely to be surpassed in EV technology, the author suggests it will also not overtake the West in ICE development. Taxes, incentives, and tariffs are tools used to steer markets toward political objectives, rather than reflecting genuine consumer demand. Globally, consumers largely continue to favor traditional internal combustion engine vehicles, pioneered by Karl Benz and popularized by Henry Ford.
