By Professor Dato Dr Ahmad Ibrahim
For years, the global story of electric vehicles was one of relentless, unified momentum. Governments from Beijing to Brussels seemed to agree: the internal combustion engine’s days were numbered. But as we navigate 2026, that narrative has shattered. The world is no longer moving in lockstep on EVs. Instead, we are witnessing a fragmenting landscape where some nations are doubling down, others are strategically pivoting, and a few are abruptly reversing course.
Let’s start with the most dramatic shift: the United States. After a brief period of federal ambition, the rug has been pulled out. The $7,500 federal tax credit, a key incentive for millions of buyers, was repealed for vehicles purchased after September 30, 2025. This isn’t a tweak; it’s a policy earthquake. The result? Stalled momentum in a market that was already trailing China and Europe. It’s a clear signal that for now, the world’s largest economy is stepping aside from the EV race. Some cite the change in the climate change stand by the current administration.
Across the Atlantic, the European Union is playing a more nuanced game. Remember the much-hyped 2035 ban on new internal combustion engine vehicles? Gone. In its place is a softer, perhaps more realistic, 90% CO₂ reduction target. This allows hybrids and some petrol cars to survive past that date. The EU hasn’t abandoned electrification – Italy is still offering eye-watering subsidies of up to €11,000 per car – but it’s trading ideological purity for industrial pragmatism. It’s a pivot, not a retreat.
Then there’s Canada, which once seemed eager to follow California’s lead. Not anymore. Ottawa has paused – and in some reports, scrapped – its federal mandate requiring 60% of sales to be zero-emission by 2030. It’s a stunning about-face from a country with hydroelectric power and green ambitions.
Meanwhile, a few holdouts are accelerating. The United Kingdom, post-Brexit and free from Brussels’ dithering, is keeping its foot on the pedal. A 2030 phase-out remains law, and the Zero Emission Vehicle (ZEV) mandate will actually tighten to 33% of sales in 2026. It’s a high-risk, high-reward bet that UK drivers will follow the law.
But the real action is in Asia. China has entered a market-led sustainability phase, having phased out direct purchase subsidies. Why? Because they no longer need them. New energy vehicles (NEVs) now exceed 50% of passenger vehicle sales. The Chinese strategy has worked almost too well. And to keep the pressure on, a new “Dual-Credit” mandate will require automakers to hit NEV quotas of 58% by 2027. This is supply-side brute force.
India and Thailand, meanwhile, are playing catch-up with gusto. India’s new PM E-DRIVE scheme is laser-focused on electric two- and three-wheelers, buses, and trucks – the workhorses of its economy. Thailand, aiming to be a global EV hub, is dangling incentives to turn its auto industry green.
So, where does this leave Malaysia? Unlike the US which is retreating, or the EU which is pivoting for competitive reasons, Malaysia is pursuing a strategy of controlled escalation. It is using its market access as leverage to build a domestic EV supply chain, from semiconductors to assembly lines. This has generated much debate among the automotive players in the country.
And finally, spare a thought for Australia – a laggard turned learner. For the first time ever, it enforced fuel efficiency standards (NVES) in January 2025. Yes, one of the world’s most car-dependent nations just discovered regulations that the rest of the world has had for decades.
So what’s the takeaway? The era of a single, global EV policy is over. We now have three distinct speeds: the accelerators (UK, China, South Korea, India), the pivoters (EU, Thailand), and the brakers (US, Canada). If you’re an automaker, this is a nightmare of fragmented compliance. If you’re a climate hawk, it’s a worrying sign of waning political will. But if you’re a pragmatist, it’s simply the messy, uneven reality of a historic energy transition. The question is no longer if the world will go electric, but who will arrive first – and who will be left behind.
—
The author is affiliated with the Tan Sri Omar Centre for STI Policy Studies at UCSI University and is an Adjunct Professor at the Ungku Aziz Centre for Development Studies, Universiti Malaya.
