Gas-powered cars may be regaining traction in the U.S., but globally, they just fell below half of new-vehicle sales for the first time.
The details: Internal combustion engine (ICE) vehicles accounted for less than half of new vehicles sold globally in the first six months of the year, driven in large part by high gas prices stemming from the Iran conflict, according to Automotive World.
Pure gas-powered car sales dropped 10% to 20.25 million globally, cutting their market share by 3.0 percentage points to 49%, down from 73% in 2021, per Mobility Global Data.
In China and Europe, the shift away from ICE vehicles was more pronounced, with sales falling 26% and 13%, respectively.
During the first half of 2026, battery electric vehicle (BEV) sales rose 12% to 6.87 million, capturing 17% of the global market.
Hybrid sales rose 10% to 7.27 million during the first half of 2026, capturing 18% of the global market.
What they’re saying: “EV adoption slowed [around 2024] and hybrids grew due to subsidy cuts and other factors, but higher oil prices have renewed appreciation for EVs’ lower operating costs, and sales are now growing again,” said Yoshiaki Kawano, Associate Director at Mobility Global, per Automotive World. “Few EV buyers return to gasoline vehicles or hybrids, and as prices continue to fall, demand driven by genuine consumer needs rather than subsidies is likely to expand.”
Why it matters: The global shift away from pure ICE vehicles reinforces the need for dealers to maintain a diverse powertrain mix as fuel prices and consumer preferences evolve, with growing BEV and hybrid sales creating opportunities even as demand varies significantly by market.
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Between the lines: The shift in the first half of 2026 and looming uncertainty surrounding fuel prices put major global automakers in an interesting predicament as they adjust their U.S. powertrain offerings following the elimination of the $7,500 federal tax credit, amid mixed findings on domestic EV demand.
According to Mobility Global, from June 2025 to June 2026, 52,154 EV households in the U.S. returned to the market and purchased a gasoline vehicle, excluding hybrids and plug-in hybrids—a 15.9% year-over-year increase.
Even Tesla’s U.S. sales have fallen, with Cox Automotive estimating that the electric carmaker’s quarterly sales in the market were likely to have dropped 31% year over year to 123,880 vehicles, according to Financial Times.
However, a state-by-state report released by the Alliance for Automotive Innovation analyzing the U.S. electric vehicle market for the second quarter of 2026 found that EV market share increased in 47 states, while ICE vehicle sales dropped, per Aftermarket Matters.
What they’re saying: "Some brands are actually seeing shortages of the EVs they sell because demand is outpacing supply,” CDK’s Dave Thomas told CDG News recently. “I never believed, even with massive incentives, car buyers were opting for a still very expensive product only because of the subsidized deal. None of our research shows that.”
Bottom line: Diverging global and U.S. powertrain trends are making the market increasingly difficult to read, reinforcing the importance for automakers and dealers to stay flexible with their vehicle mix as fuel prices, affordability, and consumer preferences continue to shape demand.
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