Electric Vehicle Watch · October 19, 2026
Global EV Sales Fall for the First Time in Seven Months as Europe Sets a Record, France and Germany Move to Soften the 2035 Ban, California's Rebate Hits 12,000 Buyers, and Tesla's Self-Driving Case Narrows
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The EV Market Splits: Europe Sets Records While China and North America Pull the Global Total Down
The global electric vehicle market has entered a more uneven phase. September sales fell 2% year-on-year to about 2.15 million units, ending a six-month growth streak, according to Benchmark Mineral Intelligence data reported by Reuters on October 16. The headline number hides widening regional divergence: Europe set an all-time monthly record with nearly 600,000 EVs sold, up 39% year-on-year and 10% above the previous high set in June, while China fell 18% to about 1.11 million and North America collapsed 44%. The North American decline is largely a base effect — buyers rushed to purchase in September 2025 before the expiration of federal EV tax credits, which the Trump administration allowed to lapse at the end of that month.
Policy is now the dominant variable. On October 16, France and Germany agreed on a joint position that would soften the EU's effective 2035 ban on new combustion-engine cars, reducing the required emissions cut from 100% to 90% and pairing the concession with tougher "Made in Europe" rules. In California, a new $270 million state rebate program has supported nearly 12,000 EV purchases since August, even as the state's overall EV share fell to 18% from 23% a year earlier. And in the courts, the Ninth Circuit reversed class certification in litigation over Tesla's "self-driving" marketing claims, a procedural win for Tesla that leaves the underlying case pending.
On trade, the EU and China reached an understanding to reduce Chinese hybrid vehicle exports to Europe, with quotas set to remain at least at the 2025 level of 302,000 units and increase annually — a shift from tariff confrontation to managed rules. And on technology, Geely has unveiled a 2.2 MW charging system that it claims can take a compatible EV from 10% to 70% in 4.5 minutes, setting up a direct challenge to BYD's flash-charging ambitions. Meanwhile, Leapmotor began producing its B10 at Stellantis's Zaragoza plant on October 16, the clearest sign yet that Chinese automakers are localizing European production rather than relying solely on exports.
Today's Top Stories
Global EV Sales Fall 2% in September as Europe Hits a Record and North America Drops 44%
What happened: Global sales of battery-electric and plug-in hybrid vehicles fell 2% year-on-year to approximately 2.15 million units in September 2026, the first decline in seven months, according to Benchmark Mineral Intelligence data reported by Reuters on October 15–16. Europe sold nearly 600,000 EVs, up 39% year-on-year and 10% above the previous monthly record set in June. China fell 18% to about 1.11 million. North America dropped 44%, the steepest decline of the year, driven by the comparison with September 2025, when buyers rushed to claim federal EV tax credits before they expired. For the first nine months of 2026, global sales reached 15.5 million units, up 3% year-on-year.
Why it matters: The global EV market is no longer moving in one direction. Europe's record reflects still-available national incentives, new model launches, and automakers' need to comply with EU CO2 targets. China's decline reflects a slowing domestic economy and the end of a prolonged subsidy-driven boom. North America's collapse is a policy story: the withdrawal of federal support has removed the floor beneath demand. For automakers, the implication is that regional strategy matters more than global scale — a model that works in Europe may not work in the US, and vice versa. For investors, the divergence argues against treating "global EV demand" as a single narrative.
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France and Germany Agree to Soften the EU's 2035 Combustion-Engine Ban
What happened: France and Germany reached a joint position on October 16 that would reduce the required cut in new-car CO2 emissions by 2035 from 100% to 90%, allowing the sale of combustion-engine and hybrid vehicles after 2035 without penalty payments, according to Deutschlandfunk and Euronews. German Chancellor Friedrich Merz said the "combustion-engine phase-out is history." In exchange for the concession, France secured tougher "Made in Europe" rules favoring European-produced cars and components. The agreement is a bilateral position, not yet EU legislation — it must be considered by other member states and translated into formal rules.
Why it matters: The 2035 ban was the anchor of Europe's EV transition. Softening it changes the investment calculus for every automaker operating in Europe. Hybrids and plug-in hybrids now have a longer runway, which may reduce the urgency of full electrification for some manufacturers — particularly those with strong hybrid lineups. But the "Made in Europe" conditions are a defensive measure against Chinese imports, and they may accelerate the localization strategies already visible in Stellantis–Leapmotor's Zaragoza production. Environmental groups have criticized the deal as a retreat. The political risk is that the compromise satisfies neither the industry nor the climate agenda.
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California's $270 Million EV Rebate Program Supports Nearly 12,000 Purchases
What happened: California said on October 16 that nearly 12,000 residents have bought EVs using rebates under a new $270 million program funded jointly by the state and automakers, per Reuters. The program, signed into law by Governor Gavin Newsom in July, offers $3,500 rebates on new EVs priced up to $50,000 and $1,750 on used EVs priced up to $25,000. It is funded with $135.5 million from the state and $135.5 million from participating automakers, including Ford, GM, Honda, Hyundai, Kia, Toyota, Lucid, Nissan, Rivian, Subaru and Volvo. No funds remain for Tesla models. Despite the program, EVs accounted for 18% of California sales through September 30, down from 23% a year earlier and 25% in 2024.
Why it matters: California is the largest US EV market, and its experience is a test of whether state-level incentives can offset the withdrawal of federal support. The early numbers suggest they can move units — nearly 12,000 purchases in roughly two months — but not enough to reverse the broader decline. The exclusion of Tesla from the program is notable: Tesla accounts for more than half of EVs sold in California, yet the program's automaker-funded structure means Tesla is not participating. That may disadvantage Tesla in its home state at a moment when its US sales are already under pressure.
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Ninth Circuit Reverses Class Certification in Tesla "Self-Driving" Case
What happened: The US Court of Appeals for the Ninth Circuit on October 16 reversed a lower court order that had certified three classes of California Tesla buyers accusing the company of misleading them about the capabilities of its Full Self-Driving technology, per Reuters. The three-judge panel found too many individualized questions about what each buyer actually saw before purchase, making a class action unsuitable. The ruling is not a decision on the merits — the underlying false-advertising case remains pending, and plaintiffs may pursue individual claims.
Why it matters: The ruling is a procedural win for Tesla, but it does not resolve the core question of whether the company's marketing overstated the capabilities of its hardware. For automakers more broadly, the case illustrates the legal risk of selling software-dependent features whose performance can vary by vehicle, road conditions and over-the-air updates. As more vehicles ship with advanced driver-assistance systems, the line between marketing language and enforceable capability claims will be tested repeatedly.
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China and the EU Agree to Manage Chinese Hybrid Vehicle Exports
What happened: The EU and China reached an understanding in early October to reduce Chinese exports of hybrid and plug-in hybrid vehicles to Europe, according to EU Trade Commissioner Maroš Šefčovič. The arrangement sets a quota no lower than the 2025 level of 302,000 units, with an annual increase, replacing the threat of tariffs with a managed trade mechanism. China's Ministry of Commerce has described the understanding as "reciprocal and mutually beneficial" and rejected claims that it resulted from EU pressure. The deal also facilitates European access to rare earth elements and permanent magnets.
Why it matters: The EU's 2024 tariffs on Chinese battery-electric vehicles pushed Chinese manufacturers toward plug-in hybrids, which were treated differently under the tariff schedule. The new understanding closes that gap. For Chinese automakers, the quota creates a ceiling on export growth, making local production in Europe more attractive — a trend already visible in Leapmotor's Zaragoza plant. For European manufacturers, the deal buys time but does not solve the underlying cost disadvantage. The shift from tariffs to quotas also signals a broader EU preference for negotiated trade management over confrontation.
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Geely Unveils 2.2 MW Charging System Claiming 10% to 70% in 4.5 Minutes
What happened: Geely unveiled a 2.2 MW charging system that it says can charge a compatible EV from 10% to 70% in 4.5 minutes and from 10% to 97% in 8 minutes 40 seconds under normal ambient temperatures, per Reuters via Economic Times. The system uses AI across cloud and vehicle systems to monitor battery health, manage thermal control and predict hazards. Geely executive Zhang Dewang said current charging speeds are "already approaching the physical limit" and that marginal gains from further increases will become "increasingly small." The announcement is a direct response to BYD's flash-charging push; BYD has said it plans to build 90,000 charging stations by 2028.
Why it matters: Charging speed is becoming the new battleground in China's EV market, where range anxiety and charging convenience are decisive purchase factors. Geely's claim, if validated in real-world conditions, would narrow the gap with BYD and raise the competitive bar for every automaker selling in China. But the infrastructure requirements are substantial: 2.2 MW chargers demand grid capacity that most locations do not currently have, and battery degradation at such high charge rates remains an open engineering question. The claim should be treated as a manufacturer's target, not an independently verified outcome.
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Also in the News
Additional developments worth tracking:
Leapmotor begins B10 production in Zaragoza: Stellantis and Leapmotor officially started production of the Leapmotor B10 at the Figueruelas plant in Zaragoza, Spain, on October 16, per Stellantis. The B10 will be built alongside the Opel Corsa and Peugeot 208. Leapmotor plans to add the B05 in 2027. The milestone is the clearest evidence yet that Chinese automakers are localizing European production in response to tariff and quota pressures.
BMW Gen6 battery enters series production in Shenyang: BMW's sixth-generation high-voltage battery entered series production in Shenyang, China, on October 16, per BMW Group. The battery uses cylindrical cells and will power locally produced Neue Klasse models. The project represents a RMB 10 billion investment.
China's power battery installations up 16.7% year-to-date: China's power battery installations reached 576.3 GWh in the first nine months of 2026, up 16.7% year-on-year, according to China Finance. Growth was driven by new-energy commercial vehicles and higher battery capacity per vehicle.
Tesla Roadster revealed with SpaceX thrusters: Tesla unveiled a redesigned Roadster on October 16 featuring cold-gas thrusters developed with SpaceX, per Daily Sun. Production is not expected before 2028. The vehicle is a halo product, not a volume EV, and should not be read as a signal about Tesla's core market strategy.
VinFast opens VF 8 bookings in the Philippines: VinFast opened early bookings for the VF 8 electric SUV in the Philippines on October 19, offering the first 1,000 customers a free one-year battery subscription, per Tribune. The move extends VinFast's Southeast Asian expansion beyond Vietnam.
What to Watch Next
- Tesla Q3 earnings (October 21). Watch for margin pressure, negative cash flow conversion, and progress on the robotaxi business. Q3 deliveries declined 2% year-on-year.
- EU member-state response to the Franco-German car deal. The bilateral position must be translated into EU legislation; watch for opposition from smaller member states and environmental groups.
- California rebate program funding. With $270 million allocated and nearly 12,000 purchases already made, watch for remaining funds and whether the program is extended or expanded.
- Geely's 2.2 MW charging rollout. Watch for independent verification of charging speeds, grid-capacity partnerships, and whether BYD responds with a higher-power system.
- EU–China hybrid quota implementation. Watch for formal rules, enforcement mechanisms, and whether Chinese automakers accelerate European production in response.
- Leapmotor B10 European deliveries. Watch for pricing, volume targets, and whether the Stellantis–Leapmotor model becomes a template for other Chinese-European partnerships.
- Tesla self-driving litigation. The class action is blocked for now, but individual claims and the underlying case remain active. Watch for appellate rulings and regulatory scrutiny of FSD marketing.
The EV market's next phase will be defined by policy divergence, not technological convergence. Europe is setting sales records while softening its 2035 ban — a contradiction that reflects the political difficulty of balancing climate targets with industrial competitiveness. China is slowing at home while exporting and localizing abroad. North America is contracting as federal support disappears. The automakers that navigate this environment successfully will be those that can adapt product mixes and manufacturing footprints to regional rules rather than assuming a single global trajectory.
For automakers: Hybrids have a longer runway in Europe than the 2035 ban implied. That favors manufacturers with strong hybrid lineups and may slow the urgency of full electrification for some. But the "Made in Europe" conditions raise the bar for local content, which will require supply-chain investment.
For investors: The divergence between Europe's record sales and North America's collapse argues against treating global EV demand as a single thesis. Regional exposure matters. Battery makers with European and Chinese exposure face different demand curves than those focused on the US.
For charging providers: Geely's 2.2 MW claim, even if unverified, signals that the charging-speed race is accelerating. The infrastructure required — grid capacity, thermal management, battery engineering — will determine whether these speeds are achievable at scale.
For policymakers: The Franco-German deal and the EU–China hybrid quota both reflect a shift from prescriptive rules to managed trade and flexible targets. That may be more politically sustainable, but it also makes the transition less predictable for everyone involved.
The CODEW Stat
90% — the share of new-car emissions cuts that France and Germany now propose for 2035, down from 100%. The number matters less for what it changes in the climate math than for what it signals about the politics of the EV transition. The 100% target was the clearest statement that Europe intended to end the combustion engine. The 90% target keeps the door open for hybrids and, in practice, for combustion engines running on renewable fuels. For automakers, that reduces the risk of stranded investments in hybrid powertrains. For the climate agenda, it weakens the signal that electrification is inevitable. And for Chinese manufacturers, it may slow the urgency of European localisation — though the "Made in Europe" conditions in the same deal push in the opposite direction. The compromise is a preview of how the next phase of the transition will be fought: not over whether to electrify, but over how fast, and who bears the cost of getting there.
Sources: Reporting sourced from Reuters, Benchmark Mineral Intelligence, Deutschlandfunk, Euronews, US News, Charlotte Observer, Saba/Yemen, Economic Times, Stellantis, BMW Group, China Finance, Daily Sun, Tribune, and The CODEW Pulse, covering EV developments from September 23 to October 19, 2026. Reported but unconfirmed deals, production timelines and performance claims are labeled accordingly.
All factual claims regarding sales figures, policy positions, litigation, and production are drawn from contemporaneous reporting and company disclosures. Editorial analysis is clearly distinguished from reported facts throughout. Manufacturer performance claims, including charging speeds, are company-reported and have not been independently verified. Sales data is sourced from Benchmark Mineral Intelligence and may be revised. Policy positions described as agreements are not yet enacted legislation. This briefing does not provide investment advice.
Reviewed by Erwin Castro
on
Monday, October 19, 2026
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