The global electric vehicle market reached 9.1 million sales in the first half of 2025, representing a robust 28% increase compared to the same period last year, according to new data from research firm Rho Motion. But beneath these impressive global numbers lies a stark regional divide that’s reshaping how businesses should think about vehicle strategies for their driving employees.
While China dominated with 5.5 million EV sales (up 32%) and Europe contributed 2.0 million sales (up 26%), North America managed only modest 3% growth. Even more telling: the U.S. saw just 6% growth, while Canada experienced a dramatic 23% decline. Mexico was the regional bright spot with 20% growth, largely driven by Chinese EV imports.
The picture is about to get more complicated. On July 4, President Trump signed legislation that eliminates all Inflation Reduction Act EV tax credits after September 30, 2025. Just over half of the EVs sold in the U.S. this year qualified for those credits, and Rho Motion predicts a rush in Q3 before the subsidies disappear—followed by a decline in sales after that.
The Policy Whiplash Effect
The abrupt policy shift exemplifies the volatility that businesses face when making fleet decisions based on government incentives. According to J.D. Power’s E-Vision Intelligence Report, 87% of EV shoppers in 2024 took advantage of the tax credit—many citing it as a key reason for their purchase. When such a significant purchasing factor disappears overnight, it creates uncertainty for both consumers and employers.
This uncertainty extends beyond just purchase decisions. Toyota Motor Corp. recently delayed the launch of its planned gas-electric hybrid SUV, shifting production from late 2025 to early 2026, highlighting growing challenges in the global electric vehicle sector as automakers adjust production targets to reflect changing consumer demand and policy conditions.
For businesses that mandate specific vehicle types through traditional fleet programs, these policy shifts create operational headaches. Companies that committed to all-electric fleets may find themselves navigating supply constraints, changing incentive structures, and employee resistance—all while trying to maintain productivity and manage costs.
The Diverging Regional Landscape
The global EV market’s uneven development reveals another challenge for multinational companies or those with geographically dispersed workforces. Spain is leading European growth with 85% EV sales increase, while France is struggling with a 13% decline due to reduced subsidies. In Europe, the UK and Germany are showing solid growth at 32% and 40% respectively, but each market has different incentive structures, charging infrastructure, and consumer preferences.
This patchwork of regional differences makes one-size-fits-all vehicle policies increasingly problematic. What works for a sales team in California may be completely inappropriate for field service technicians in rural Canada or account managers in emerging EV markets.
Beyond the EV Binary: The Rise of Hybrid Solutions
While media attention focuses on the pure electric versus gasoline debate, market data reveals a more nuanced reality. Toyota announced that the 2026 RAV4—America’s top-selling SUV—will be offered exclusively as a hybrid or plug-in hybrid, eliminating traditional gas engines for the first time. RAV4 hybrids already accounted for 44% of the vehicle’s sales last year, with plug-in models representing 6.5%.
This shift toward hybrid technology illustrates how the market is moving beyond simple binary choices. Toyota’s electrified vehicles reached 48.1% of total sales in the first half of 2025, up from 44.5% the previous year. For many employees, hybrid vehicles offer the best of both worlds: improved fuel efficiency and reduced emissions without the range anxiety or charging infrastructure concerns associated with pure electric vehicles.
The Employee Choice Advantage
These market dynamics underscore why employee choice in vehicle selection has become more valuable than ever. Rather than betting on a single technology or trying to predict policy changes, forward-thinking companies are discovering the benefits of letting employees choose vehicles that work for their specific circumstances—both professional and personal.
Consider the diverse needs within a typical mobile workforce:
- Urban sales representatives might prefer compact EVs for city driving and readily available charging
- Rural service technicians may need hybrid pickups that can handle both daily commutes and remote work sites
- Long-distance account managers might choose plug-in hybrids for local electric driving with gasoline backup for longer trips
- Multi-state sales teams could benefit from different choices based on their regional charging infrastructure
Geographic Flexibility in Action
The regional variations in EV adoption highlight another advantage of employee choice: geographic adaptability. While Mexico is experiencing 20% EV growth, Canada faces a 23% decline. A company with operations in both markets benefits when employees can choose vehicles appropriate for their local conditions rather than being locked into a single fleet strategy.
This flexibility becomes even more important as charging infrastructure, local incentives, and cultural preferences continue evolving at different rates across markets. Employees understand their local driving patterns, infrastructure limitations, and personal needs better than any corporate fleet manager could.
Technology Transition Management
Toyota’s production delays and design changes reflect the broader challenges automakers face in scaling new technologies. When companies mandate specific vehicle types, they absorb all the risks associated with supply chain disruptions, technology delays, and changing consumer preferences.
Employee choice distributes these risks naturally. Some employees will adopt new technologies early, others will wait for proven reliability and infrastructure, and many will choose hybrid solutions that bridge both worlds. This organic adoption pattern typically results in smoother transitions and higher employee satisfaction.
Cost Predictability
From a financial perspective, employee choice programs often provide more predictable costs than traditional fleets. Rather than absorbing the depreciation risk, maintenance costs, and residual value uncertainty of owned vehicles, companies can establish reimbursement rates that reflect actual market conditions and employee usage patterns.
Modern reimbursement programs can incorporate location-specific rates that account for local fuel costs, insurance rates, and driving conditions. This geographic granularity becomes increasingly important as different regions experience different rates of EV adoption and infrastructure development.
Technology Integration and Oversight
Today’s vehicle reimbursement platforms address traditional concerns about oversight and control while maintaining employee flexibility. GPS-validated mileage tracking, automated expense reporting, and real-time spending visibility give companies the data they need without dictating vehicle choices.
These systems can easily accommodate the current technology transition by tracking different types of vehicles and reimbursement rates. Whether an employee chooses a traditional vehicle, hybrid, plug-in hybrid, or full electric, the platform can apply appropriate rates and generate necessary reporting for tax compliance and environmental tracking.
Looking Forward: Preparing for Continued Evolution
Rho Motion analysts predict over 20 million EVs will be sold globally in 2025, representing 18% growth, but this growth remains unevenly distributed. As Rho Motion data manager Charles Lester noted, “With Trump’s latest cuts in his ‘Big Beautiful Bill,’ the US could struggle to see any growth in the EV market overall in 2025”.
For businesses, this continued uncertainty argues for vehicle strategies that can adapt quickly to changing conditions. Employee choice programs provide natural flexibility that allows companies to benefit from technological improvements and policy changes without being locked into specific platforms or technologies.
The current EV market transition offers valuable lessons about the importance of flexibility in vehicle programs. Rather than trying to predict which technologies will dominate or which policies will persist, companies can leverage employee choice to navigate the transition successfully while maintaining operational efficiency and cost control.
As the global vehicle market continues evolving at different speeds across different regions, the companies that provide employees with choice and flexibility will be best positioned to adapt, attract talent, and optimize their mobile workforce strategies.
For businesses seeking to balance environmental goals with operational flexibility during the ongoing vehicle technology transition, professional guidance can help design reimbursement strategies that accommodate diverse employee needs while maintaining cost predictability and administrative efficiency.
