The electric vehicle sector in the United States is experiencing extreme bifurcation, with new EV sales plunging 28% year-over-year in Q1 2026 following the Trump administration’s decision to eliminate the $7,500 consumer tax credit. This regulatory rollback has triggered serious reassessment among automakers and investors alike, particularly concerning the scalability of clean mobility business models without consumer subsidies. For GCC sovereign wealth funds with billions committed to global EV ventures, including SoftBank’s Vision Fund positions and Mubadala’s allocations into Tesla and Rivian equity, this shift underscores the heightened policy risk in developed markets—forcing capital allocators to recalibrate exposure toward EV infrastructure plays in Asia and Europe, where regulatory tailwinds remain robust.
In sharp contrast, the used EV segment is accelerating, recording a 12% year-over-year rise in Q1 and a 17% sequential uptick from Q4 2025. Financial Times reporting reveals a convergence of macro catalysts: elevated gas prices averaging over $4 per gallon and a flood of off-lease EVs following the surge in leasing activity in the early 2020s. By the end of 2026, EVs are projected to comprise 15% of all returned lease vehicles—double the current rate—driving price parity with gas-powered equivalents at an average resale value of $34,821 versus $33,487. This unexpected surge in used EV affordability is forcing tech and auto-focused MENA venture capital funds to reconsider secondary-market business models, including fleet aggregation, battery warranty monetisation, and EV-as-a-service plays across emerging markets.
The emerging intra-US EV market split provides a cautionary geopolitical dimension: first-wave investors are now looking towards the Gulf region’s ascendancy as a clean energy mobility hub. Saudi Arabia’s NEOM mobility strategy, backed by PIF capital, and Abu Dhabi’s investment in hydrogen-based EV refuelling infrastructure are showing greater resilience against regulatory pivots. While US OEMs brace for potential tariff pressures and policy headwinds, Middle Eastern and Asian stakeholders are accelerating indigenous manufacturing and cross-border EV corridor developments—positioning themselves as beneficiaries of the next phase of global mobility transformation. The mid-market’s price parity moment may herald a mass adoption wave well outside the US, with institutional flows now favouring capital deployments into markets with policy stability and infrastructure-first approaches.
