Haven’t you heard the good news? We’re going back to gas here in America. With no fuel economy rules to speak of anymore, or really any standards when it comes to greenhouse gas emissions, our beloved car companies are now free from the burden of having to do stuff none of them ever really wanted to in the first place.
If you’re a petroleum company, the current moment might feel like a kind of godsend. After all, the sales of purely combustion cars have been falling for years, and that sort of thing can’t be good for business.
But there’s just one problem: outside of the United States, the rest of the world is electrifying quickly. Even countries we’d deprecatingly classify as “developing” ones. And soon, the world’s largest economy will be, perhaps for the first time in modern history, a technological laggard.
That kicks off this Monday edition of Critical Materials, our morning roundup of industry and technology news. Also on deck today: a raft of European automakers may have the toughest time with new U.S. tariffs, and China’s hybrid sales are falling—but not for the reason you might think.
30%: America Blows It
2025 Jeep Wagoneer S Limited
Photo by: Jeep
I have never wanted to position InsideEVs as some smug, condescending rag that talks down to ordinary folks about the electric vehicle transition. Our goal is to educate, inform and empower, and to meet people where they are. And we’ve reported openly and candidly about this transition’s shortcomings and failures, as well as the work that still needs to be done.
But as a publication with a readership that’s majority American, it’s time to be candid: we’re getting smoked by the rest of the world at this stuff. Lapped. Dog-walked. Dusted. And that has profound implications for our own technological, scientific and manufacturing relevance in the years to come.
Here’s a recent Bloomberg column to explain:
Far from trailing the rich world in their enthusiasm for battery cars, developing nations are surging ahead.
China (where plug-in vehicles have nearly half the market) gets most of the attention, but neighboring Vietnam isn’t far behind: Pure-play EV-maker VinFast Auto Ltd. accounted for more than a third of car sales in the first half of this year.
Turkey’s 13% sales share for fully electric vehicles in the first quarter was about double the penetration rate in Spain and Australia, according to a survey by Strategy&. In Indonesia, the share was about the same as in the US, at 7.4%. In Malaysia, it was 8.6% in the first half.
More than three-quarters of the value of vehicles brought into Nepal, Sri Lanka and Djibouti last year was purely electric. Import shares in Ethiopia and Laos were 40% and 30% respectively. Plug-in sales increased by 60% in developing countries as a whole in 2024, according to the International Energy Agency.
So what happened here? Well, in these so-called “developing” countries, the lower ownership costs of EVs, higher costs of fuel and existing air pollution issues make driving electric far more appealing than the alternative. (I’d add that since some of those countries never built out robust gas infrastructures or have homegrown automakers still dependent on gas cars to be profitable, they’re in a better position than we are to skip gas entirely and go straight to electric power.)
Toss in the rising rates of electrification in Europe and the clear, established EV dominance in China, and it’s clear America is getting left behind.
“Who cares!”, you’ll no doubt scream after coming across this story in Google News, before trying to stop seething long enough to send me some all-caps hate mail. “Let those other countries have their little EVs! This is America, and we want our gas cars!”
Sure. But the auto industry has always chased two things: efficiency and performance. And EVs trump gas cars at both. How long do you think the automakers that serve the U.S.—pretty much all of whom operate globally—will be willing to go along with archaic technology when the writing is on the wall everywhere else?
“Most of the world is already taking advantage of cleaner, cheaper road transportation,” that columnist writes. “By the time developed countries realize how far they’ve fallen behind, it will be too late to catch up.”
60%: China’s Hybrid Market Is Falling Off; BYD Stumbles
Photo by: InsideEVs
It’s crucial to note that Chinese exports have a lot to do with the situation above. Hitting limits in their home countries, more and more Chinese automakers are expanding and even producing abroad, especially in the so-called “Global South.” The Chinese domestic market is a brutal one, beset by too many brands, an overabundance of competition and a crushing price war for a dwindling pool of buyers.
But according to Reuters, growth in EV infrastructure means that buyers may be starting to move on from hybrids:
Demand for hybrids continued to weaken, with sales of plug-in and extended-range hybrids combined falling 3.6% from July last year as advancements in battery technology and charging infrastructure eased range anxiety about pure EVs.
The trend boosted EV makers such as Leapmotor, Xiaomi and Xpeng, which reported record sales in July, but weighed on companies like BYD and Li Auto, which relied on hybrids for the bulk of their sales and profits.
Don’t get too worried about ol’ BYD there, however. It’ll probably be fine:
BYD saw vehicle sales drop in China for the third consecutive month in July, with a fall of 12% year-on-year, while its share of China’s new energy vehicle segment shrank to 27.8% from 35.4% a year ago. Its global deliveries, however, edged higher last month, supported by a surge in overseas shipments that accounted for over 20% of total sales.
Meanwhile, Chinese car export growth ticked up again in July. See what’s going on here?
90%: Europe’s Smaller Players Grapple With Tariffs, Electrification In Different Ways
2025 Volkswagen ID.Buzz Review
Photo by: DW Burnett / Motor1
Here’s the other challenge for America’s new pro-gas agenda: even if people are skittish about EVs, every data point shows they want more hybrids. Offering a mix of powertrains in the U.S. will likely be the way to go in the near future, which is a tough situation for a variety of smaller European players like Volkswagen, Volvo, Polestar and Jaguar Land Rover, according to Automotive News.
(Yes, I’m counting Volkswagen as a “smaller” player here. Like it or not, it has about 5% of the market in the U.S., despite being a sales powerhouse in Europe and Latin America.)
From that story:
Years ago, Volkswagen of America went heavy into electric vehicles for the U.S. market and turned away from hybrids. That decision means VW is now playing catch-up with its U.S. lineup as it looks to grow market share in the critical region. Hybrids are coming for the VW brand, but the first ones are still years away.
Meanwhile, high tariffs and slowing EV sales have required Volvo Cars and Polestar to pare their current and future U.S. lineups. The Geely-owned brands import the majority of the vehicles they sell in the U.S. and have a high reliance on Chinese production.
[…] Jaguar Land Rover has delayed the arrival of its new generation of EVs for a few months, pushing back the debut of the electric versions of the Range Rover, Range Rover Sport and Velar to carry out extended testing.
JLR officials know they have to get the quality rankings from their brands up off the bottom of the list, and the new generation of electric vehicles offers the company its best chance of doing that.
All of those brands have their unique challenges at the moment, and the next few years will be tricky to get right.
100%: Where Did America Screw Up Most On EVs?
US President Joe Biden test driving the 2022 GMC Hummer EV pickup
I will say this for us as a people: we are a big, sprawling, diverse nation full of folks from all backgrounds, ethnicities and creeds. But we are also a rowdy people, and we generally do not like being told what to do.
I tend to think that EVs got especially polarizing along partisan lines when people began to believe they were being “forced” to buy them, or that they were under some kind of “EV mandate.” This wasn’t really the case, per se. But when stringent fuel economy and emissions rules were pushing the market to go electric—a necessary move to combat climate change—it also kind of was.
Call it a disaster of messaging, then, and one that many automakers glommed onto as well. The subtle implication that they’re making EVs because they have to, and not because, as most owners will tell you, it’s a better product overall.
What else am I missing here? Drop your thoughts in the comments below, or slide into my inbox.
Contact the author: patrick.george@insideevs.com
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