Electric vehicle (EV) registrations increased by 13% year-on-year in July across 16 European markets, according to data from research group New Automotive and industry group E-Mobility Europe. The data, which covers more than 90% of car sales in the European Union and the European Free Trade Association, indicates that EVs accounted for 25.7% of all new car sales in those regions during the month.
The rise in registrations follows a period of high oil prices linked to the start of the Iran war in February, which has increased the cost of fuel for combustion-engine vehicles. In the first half of 2026, EV sales in the European Union rose 40.5% compared to the same period in 2025, totaling more than 1.2 million cars. Industry analysts cite a combination of government subsidies, high fuel costs, and the introduction of more affordable models as primary drivers for the shift.
In France, EV registrations reached a record 35% share of the market in July, up from 17% a year earlier. This increase coincided with the implementation of a "social leasing" subsidy program designed for lower-income buyers. In the United Kingdom, Renault reported that EVs made up more than 50% of its orders in July, with the Renault 5 becoming the country's best-selling electric car for the month. The company plans to introduce an electric Twingo later this year priced under £20,000 ($26,984).
In contrast, U.S. EV sales fell more than 20% year-on-year in the second quarter following the removal of a federal EV tax break last year. Cox Automotive projects that U.S. EV sales will decline by 23% overall in 2026, resulting in a market share of 6.2%. Analysts from AutoAnalysis noted that a lack of public charging infrastructure remains a significant barrier to further growth in Europe, particularly for residents of apartment buildings who cannot charge at home.
The scale of this transition is most visible in France, where the new social leasing program helped push the EV market share to 35% of all new registrations in July. This program specifically targets lower-income residents, providing a government-subsidized entry point into the EV market that was previously less accessible. However, the benefits are unevenly distributed, as the lack of public charging infrastructure creates a barrier for the millions of Europeans who do not live in single-family homes with private driveways. Industry experts suggest this could lead to a "saturation point" where sales plateau because potential buyers lack the physical means to charge a vehicle.
Looking ahead, the European market is expected to see increased competition as Chinese brands and traditional automakers launch cheaper models to qualify for various national subsidies. Renault's release of the electric Twingo later this year will test the demand for vehicles priced under the £20,000 threshold. Meanwhile, the U.S. market faces a different trajectory, with a projected 23% drop in sales for 2026 following the expiration of federal tax credits. The long-term stability of these sales trends remains tied to global oil prices and the pace of public infrastructure development.