All that doom and gloom about the state of the electric vehicle market? That’s just an American problem. The rest of the world can’t get enough EVs, according to a new report from the International Energy Agency.

EV sales surpassed 20 million units last year, capturing 25% of the global market. Growth was highest in China and market share in other regions has also been picking up pace. In Latin America, for example, sales grew by 75%. Meanwhile, sales in the U.S. are stagnant, with EVs hovering around 10% market share. 

The EV market has gone K-shaped, and automakers of all stripes — legacy and startup — had better pay attention.

Sales figures in the U.S. were held back last year by the One Big Beautiful Bill Act, which killed EV tax credits, along with policies that have prevented Chinese automakers from entering the market. 

For startups like Rivian and Lucid, which are heavily invested in the U.S. market, it certainly makes for a more challenging road ahead. Legacy automakers are somewhat insulated since they can lean on more profitable fossil fuel vehicles — at least in the short term. But without a solid EV strategy, they stand to lose more global market share as consumer tastes and expectations shift.

Elsewhere, Chinese automakers have been driving the upper leg of the K higher. The growth has been most apparent in China, where nearly 55% of new vehicles were electric. Affordability helps: more than two-thirds of EVs sold in the country were cheaper than the average fossil fuel car.

Chinese automakers also helped drive EV sales higher in Southeast Asia, Latin America, and Europe. More than half of all EVs sold in Southeast Asia were made by a Chinese company, for example, while Europe imported over half a million Chinese EVs.

The stunning growth of EVs in Southeast Asia and Latin America punctures one prevailing theory that electric cars would be too expensive for developing economies. EV prices have been on par with internal combustion vehicles for the last two years in Thailand. “Imports of affordable electric cars from China have brought down prices and driven up EV sales in many emerging markets in recent years,” the IEA report said.

That may not last forever, though.

Chinese automakers exported more than 25% more vehicles than were bought in foreign markets. Dealers outside of China might resist accepting more EVs until they can sell what they have on hand. Plus, countries might begin to chafe at the flood of inexpensive Chinese cars and institute tariffs.

Even if that happens, it would be foolish to count Chinese brands out. The Communist Party has invested significant sums to turn its automotive industry into a powerhouse. As a result, the country has enough manufacturing capacity to fulfill 65% of global demand. Thanks to state support, Chinese automakers could produce an outsized number of vehicles far longer than other companies can remain solvent.

In the long run, though, EVs promise to undercut fossil fuel vehicles, even without subsidies. As early as next year, battery electric vehicles will be cheaper to make than internal combustion vehicles, according to Gartner.

The Trump administration is trying to steer the U.S. market back toward fossil fuels, perhaps convinced that the domestic market is different from others, but it’s pushing into stiff headwinds. The market for fossil fuel passenger vehicles and light trucks peaked in 2017, according to BloombergNEF, and while hybrid and plug-in hybrid sales are rising, they’re not growing as quickly as pure EVs.

Perhaps the most cautionary tale comes not from an American automaker, but a Japanese one.

Honda, which recently killed three EV projects, has imperiled its future as a global car manufacturer. By pulling back on EVs, it will forgo crucial lessons that have helped companies like Tesla and BYD slash the cost of their vehicles. And because EVs are ideal platforms on which to build software-defined vehicles, Honda stands to miss out on the other trend that’s sweeping the industry, one that has also helped companies trim expenses.

In all, it paints a grim picture for legacy automakers that have dialed back EV ambitions.

Companies that don’t get their respective EV houses in order could lose out to competitors in the global market, sacrificing revenue that could keep them competitive for years to come.