Germany Holding Out for 'Real Boom' on EVs Despite Strong 2025, EY Says

Germany’s electric vehicle market grew by 43% in 2025, according to EY analysis, but the consultancy warned the industry is still waiting for a true boom. The growth followed a weak 2024 after the end of a federal EV subsidy. EVs accounted for 19.1% of the car market in 2025, up from 13.5% in 2024.

EY mobility expert Constantin Gall noted the rise was more of a rebound than a surge. He said the long-awaited e-mobility boom in Germany is taking longer than expected due to lingering policy uncertainty and market fragmentation. The new EV subsidy, launched in November 2025, is limited to low-income private consumers, leaving many segments uncovered.

The analysis shows foreign automakers are expected to benefit more than local German brands from the new policy. This is due to their stronger presence in the lower-price EV segment, which remains key for mass adoption.

Why Is Growth Slowing in the Global EV Market?

Global EV sales are projected to expand by 13% to 24 million units in 2026, the slowest growth since the pandemic, according to Benchmark Mineral Intelligence. This follows 22% growth in 2025, driven by Chinese automakers like BYD. The U.S. market is expected to contract by 29%, with demand falling from 1.5 million units in 2024 to 1.1 million in 2025 after the expiration of federal tax credits.

China remains the largest EV market, with sales expected to reach 15.5 million units in 2026. Europe is also projected to see 14% growth in EV sales, driven by policy incentives and a shift toward electrification.

How Do Analysts View Tesla's 2026 Prospects?

Canaccord Genuity analyst George Gianarikas believes Tesla is well-positioned for a strong 2026. He cited the company’s fully integrated EV platform, software edge, and expansion into robotics and energy storage as key differentiators. Despite a shrinking U.S. EV tax credit, Gianarikas argues the market is resetting into a healthier, fundamentals-driven phase.

Gianarikas also pointed to global opportunities for Tesla in emerging markets such as Thailand, Vietnam, and Brazil. While these markets are not yet major contributors, he said they could provide long-term growth potential, especially as Chinese automakers expand their reach according to analyst assessment.

Germany’s market is expected to grow by 1% in 2026, down from 1.4% in 2025, as the industry adjusts to new policy frameworks and competition from global automakers. EY's analysis highlights the need for more comprehensive EV subsidies and infrastructure support to drive sustainable growth.

Investors are advised to monitor policy developments in key markets like Germany and the U.S., as well as the performance of major automakers. The global EV landscape is shifting toward price competition and technological differentiation, making it essential for companies to adapt quickly to stay ahead.