Global new energy vehicle (NEV) sales reached 3.94 million units in the first quarter of 2026, representing a 2 percent year-on-year decline, according to the latest research from TrendForce.
NEVs, including battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), and hydrogen fuel cell vehicles, accounted for 19 percent of total global car sales during the quarter.
TrendForce said China’s NEV market underperformed in early 2026, creating pressure on Chinese automakers that remain heavily dependent on domestic demand. However, Western Europe showed signs of recovery, while Japan and South Korea recorded strong growth in BEV sales.
Tesla Reclaims Top Position in Global BEV Market
Tesla regained the top spot in global BEV sales rankings during the first quarter of 2026, overtaking BYD amid weakening demand in China.
TrendForce noted that several Chinese automakers lost market share because of their heavy exposure to the domestic Chinese market. BYD, Geely, and SAIC-GM-Wuling ranked second, third, and fourth respectively in global BEV sales, but all three reported year-on-year sales declines.
In contrast, Leapmotor achieved growth by rapidly expanding its vehicle portfolio and focusing on value-driven pricing strategies.
Automakers including Kia and Toyota improved their global rankings, supported by their diversified international market presence, which helped offset regional demand weakness.
Chinese Brands Continue to Dominate PHEV Segment
Chinese automakers maintained dominance in the global PHEV segment during Q1 2026. BYD retained the leading position despite a year-on-year decline in PHEV sales, raising concerns about saturation in China’s domestic EV market.
TrendForce said intensifying competition within China is pushing major automakers to accelerate overseas expansion strategies and diversify beyond pure electric vehicles into broader hybrid powertrain portfolios.
Brands including BYD, Jaecoo, and MG have already achieved notable PHEV sales growth in international markets.
Global NEV Sales Forecast to Reach 23.35 Million in 2026
TrendForce forecasts global NEV sales will rise to 23.35 million units in 2026, representing 14 percent year-on-year growth and continuing to outpace internal combustion engine vehicle growth.
However, the market intelligence firm warned that rising upstream costs are beginning to pressure vehicle demand and pricing dynamics across the automotive industry.
According to TrendForce, pricing pressure in the automotive market is expected to intensify during 2026, shifting away from tariff-related impacts toward structural increases in raw material and component costs.
AI and Intelligent Driving Features Increase Memory Costs for Automakers
The report highlighted that growing adoption of intelligent driving technologies and AI-powered vehicle systems is significantly increasing automotive memory requirements.
As vehicles become more software-defined and reliant on high-frequency computing, automakers require larger memory capacities to support advanced driver assistance systems, infotainment platforms, AI processing, and intelligent cockpit features.
TrendForce said memory components are becoming a major cost burden for automakers due to supply-demand imbalances and sharp increases in memory pricing.
Some Chinese automotive brands have already increased prices for vehicles equipped with advanced intelligent driving packages to offset higher memory costs. Automakers in other global markets are also facing similar pressure from rising semiconductor memory expenses and geopolitical tensions affecting supply chains.
TrendForce warned that broad-based vehicle price increases could weaken the impact of government NEV incentive programs worldwide and reduce room for future discounting strategies across the electric vehicle market.
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