Global Electric Vehicle Sales Diverged In July

The global market for electric vehicles (EVs) was either summer-hot or frosty-cold in July, with sharp differences across regions. All in all, however, demand for both EVs and plug-in hybrid electric vehicles (PHEVs) continued to rise.

Let’s break this down a bit and flag a company or two that stands to benefit from the recent dynamics.

Forward here, reverse there

Data compiled by the researcher Benchmark Mineral Intelligence (and cited by media outlets like Reuters on Thursday) show that unit sales of EVs and hybrids combined increased by 9% year over year in July. In total, roughly 1.85 million units were sold, bringing the year-to-date tally to 11.5 million.

But investors in EV and hybrid makers shouldn’t necessarily go on a victory ride over this news. Although overall sales were brisk, this was due to scattered pockets of growth rather than a consistent worldwide push to buy such vehicles.

For example, sales in Europe surged 33% higher to around 450,000 units, lifting the year-to-date growth to 28%. The major factor in this was a wide set of financial incentives and tax breaks for EV/hybrid adapters. These included the restoration of income-pegged subsidies in Germany, the restart of a low-income leasing assistance program in France, and an increase in the tax deduction for corporate fleet purchases in Austria.

In China, however, sales fell by 5% to 980,000 units. Consumers in the massive Asian market were swayed by the government’s winding down of vehicle tax exemptions for hybrids and range-extended EVs; unit sales of such craft plummeted by 21%. Yet this was mitigated somewhat by the continued popularity of pure EVs — due in no small part to continued build-outs of charging networks. Also, Chinese exports remain popular abroad.

Speaking of subsidies, the end of the federal Clean Vehicle Credit on Sept. 30, 2025 is still affecting U.S. sales. Unit volume in EVs and hybrids combined tumbled by 27% in July to 140,000.

Sales in the rest of the world — i.e., outside of China, Europe, and America — almost doubled, meanwhile, to 280,000 vehicles.

The strength of the subsidy

No matter the health of a local/regional economy or the buying power of its people, vehicles are expensive, high-commitment purchases. That’s why the subsidies, or lack of them, matter so much. The possibility of saving thousands of euros, dollars, or pounds on a new ride often makes the difference in a consumer’s choice between a traditional car and an EV or hybrid.

Another major factor influencing many consumers worldwide is the sharp, recent rise in fuel prices. These are dramatically driving up the cost of ownership for traditional models, giving a free boost to a key selling point for electrics.

So, which manufacturers are looking particularly attractive given the July dynamics? I’d say the sweet spot here is the Chinese carmakers that focus exclusively or chiefly on EVs. Nio (NYSE:NIO) is worth a look as a maker of higher-margin premium models, and Xpeng (NYSE:XPEV) stands to gain from its relatively strong presence on that surging European market.

At home, American EV king Tesla (NASDAQ:TSLA) doesn’t look as appealing. It’s selling into that domestic market slump; meanwhile, it aims to pivot into one unproven segment (domestic robots, with Optimus) and another where it’s already behind (autonomous rides-for-hire, with the Robotaxi). Rivian (NASDAQ:RIVN) has more potential than Tesla, as it’s a powerhouse in the pickup market with its R1 model and is doing well in the EV delivery-vehicle niche.

On Thursday, the July report helped lift the stocks of most EV/hybrid makers to varying degrees. I have to point out that these days, there is plenty of diversity in the industry, so investors need to be selective and discerning. And, it probably goes without saying, vigilant about monitoring those overall sales statistics.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.