Burghley Capital tracks July EV slowdown
News Summary
Burghley Capital's analysis reveals that global electric vehicle (EV) market growth cooled in July 2025 to its weakest rate since January, primarily influenced by regional policy shifts, subsidy adjustments, and divergent consumer behavior trends. Worldwide EV sales reached approximately 1.6 million units, up 21% year-on-year. China, accounting for over half of global volumes, recorded 12% year-on-year growth, significantly lower than its 36% monthly average in H1 2025, due to several municipalities halting trade-in subsidies after funding allocations were exhausted. Despite sales nearing one million units and outselling petrol models for a fifth month, momentum has slowed. BYD's July deliveries were down 10.01% month-on-month, with market share slipping; Li Auto posted a 40% year-on-year drop, while Xpeng achieved record July deliveries. Plug-in hybrid sales fell year-on-year, as consumers shifted towards battery electric models. Renewed subsidy allocations from August are expected to stabilize demand in China. Europe showed strong performance with registrations advancing 48% year-on-year to approximately 390,000 units, driven by company car incentives and regulatory clarity. North America expanded 10% year-on-year, supported by new model launches. Emerging markets (e.g., Brazil, India, Vietnam) delivered stronger growth. Globally, subsidies now account for under 7% of EV spending but remain influential. The analysis concludes that policy structures remain the primary determinant of EV market performance, influencing manufacturers' product mix and pricing strategies.
Background
The global electric vehicle (EV) market has experienced rapid growth in recent years, but its expansion has been heavily influenced by government policies and incentives, particularly subsidies. China, the world's largest EV market, has long driven adoption through substantial subsidies and tax exemptions, aiming for ambitious penetration targets. The European market has fostered EV adoption through company car incentives and clear regulatory frameworks. The United States also offers incentives like the Clean Vehicle Tax Credit, though these policies can be subject to adjustments based on political and economic priorities. While subsidies account for a smaller percentage of global EV spending, they still exert significant influence on consumer demand and market share, with sudden policy shifts potentially leading to sales slowdowns, as seen in Germany following subsidy withdrawal.
In-Depth AI Insights
What does the divergence in regional EV growth, despite an overall global slowdown, truly signal about the market's long-term maturity and the investment landscape? The global EV market remains highly dependent on policy stimulus; demand curves react immediately to subsidy reductions or adjustments. The significant slowdown in China's sales, contrasted with Europe's strong growth under consistent incentives, indicates that the market is far from reaching a self-sustaining organic growth phase. Policy stability, rather than absolute market size, becomes the key differentiator for regional investment attractiveness. With global subsidies in decline, how might major EV manufacturers strategically adapt to maintain profitability and market share? Manufacturers will shift from a