In September 2026, fully electric cars made up 34.5% of new car registrations in Germany, a record according to the Federal Motor Transport Authority. France went further, at 41.7%. In Belgium and the Netherlands, electric is now the most common drivetrain on new cars. And small EVs are finally priced for ordinary households: the VW ID.Polo starts just under €25,000, the Renault Twingo Electric under €20,000.
In the United States, things are going the other way. Fully electric cars made up just 5.8% of new vehicle sales in the second quarter of 2026, or 247,226 cars, according to Cox Automotive. A year earlier the share was 7.4%, and sales volume has fallen 20.5% since then. That’s only a little more than half the share reached in the third quarter of 2025, when buyers rushed to beat the end of the federal tax credit. European buyers are switching. American showrooms are filling up with hybrids and bigger trucks.
Why Germany tipped
People don’t switch because they feel virtuous. They switch when it’s cheaper. The International Council on Clean Transportation calculated that in 2025, driving an EV in the EU cost an average of €7.40 per 100 kilometers with a mix of home and public charging, against €11.00 for a comparable petrol car. That’s about a third less. The recent fuel price spike has widened the gap: running costs for combustion cars rose by up to a third, while electricity costs barely moved.
The sticker price is the last big hurdle, and it’s coming down fast. In Germany’s mid-size and premium segments, EVs already cost no more to buy than combustion cars, according to the ICCT. Small cars aren’t there yet, but a wave of models priced between €20,000 and €30,000 is closing the gap and pushing older models down. Auto analyst Ferdinand Dudenhöffer found that buyers paid €20,240 after discounts for an Opel Corsa Electric in September 2026, 35% less than in June 2024. Patrick Plötz of the Fraunhofer Institute sums it up: once combustion and electric cars cost the same to buy, “the electric car always wins.”
That didn’t happen by accident. EU fleet CO₂ rules fine carmakers €95 for every gram per kilometer their fleet average goes over the target, multiplied by every car they sell. When the targets tightened in 2025, the possible fines ran into the billions. Rather than pay, manufacturers started building and discounting small electric cars. Governments helped on the demand side. France’s social leasing scheme puts some EVs in front of low-income households for under €200 a month. Germany brought in a new purchase premium in May and has already paid out 100,000 applications.
Diesel is next. As carmakers add electric models, they’re dropping combustion versions, because building every model in many engine variants is expensive. BMW has already said its next 3 Series won’t come with a diesel. Sooner or later, even loyal diesel drivers will run out of options. Plötz says getting to the first 20 or 30 percent of sales takes years, “but going from 30 to 80 percent can happen very fast.” Denmark shows it: 81% of new cars sold there between January and August were electric.
America backs off
The US shows what happens when policy goes the other way. The $7,500 federal EV tax credit ended on September 30, 2025, removing the biggest help buyers had with high upfront prices. What replaced it is a deduction on car loan interest for new vehicles assembled in the US. You only see it when you file your taxes, and it covers a V8 pickup just as much as an electric hatchback.
The bigger change is in regulation. Under Administrator Lee Zeldin, the EPA has formally rolled back federal greenhouse gas standards for cars and light trucks, along with the 2009 endangerment finding they rested on. Washington also revoked California’s waiver to phase out new combustion car sales by 2035. Congress has set the fines for missing fuel-economy targets to zero. States and environmental groups are challenging much of this in court, but the message to Detroit is already clear: it can go on making most of its money from gasoline engines.
The carmakers took the hint. They’ve cancelled or delayed EV plants and moved money into hybrids, which now make up 16.3% of new vehicle sales, nearly three times the share of fully electric cars. Hybrids burn less fuel in city traffic, but a conventional hybrid still runs entirely on gasoline. The administration has left the Paris Agreement and is undoing power-plant rules, and it calls all this pragmatism. In practice, American drivers stay exposed to oil price swings, and US carmakers fall further behind competitors in China and Europe.
The e-fuel detour
Europe has problems of its own. Even as buyers move on, the car industry is lobbying in Brussels to soften the 2035 phase-out of new combustion cars. Under pressure from Germany and Italy, the European Commission has proposed cutting the 2035 target from a 100% to a 90% COâ‚‚ reduction. Carmakers could cover the remaining 10% with credits for low-carbon European steel, e-fuels and biofuels, which would keep plug-in hybrids and range extenders on sale. Parliament and member states are still negotiating, with a deal expected around the turn of the year. Some conservative lawmakers and governments want to go further, down to 80%.
E-fuels sound clever until you add up the energy. You split water into hydrogen with renewable electricity, capture COâ‚‚, turn the two into liquid fuel, transport it, and then burn it in an engine that turns maybe a quarter of it into motion. By the end, an e-fuel car needs roughly four to six times as much electricity as a battery car to go the same distance. Clean power is still limited, and aviation and shipping have few other ways to cut emissions. Spending that power on commuter cars makes no sense.
Biofuels have a different problem: land. Growing fuel at scale means huge areas of cropland, plus fertilizer and pesticides. It competes with food, and it pushes farming into forests and wetlands that currently store carbon. Clearing ecosystems so carmakers can keep selling engines after 2035 just pushes the problem back and calls it green.
Build the system, not just the car
Every year the combustion engine is kept going means more tailpipe pollution in the neighborhoods next to highways, and less time to keep warming in check. Propping up legacy carmakers’ quarterly earnings doesn’t protect jobs in the long run. It just means the factories are out of date when the rest of the world has moved on.
Europe shows that when the rules make carmakers sell affordable EVs, people buy them, and quickly. In Norway, where about a third of all cars on the road are already electric, petrol stations are pulling out pumps and putting in chargers. But swapping one private car for another is only part of the job. We also need more electric rail, transit that people can count on, and a grid that’s clean, reliable and publicly accountable. Another ten years of rollbacks and synthetic-fuel promises is time we don’t have.
Originally published on Substack.
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