According to the latest report by the International Energy Agency (IEA), electric vehicle sales are on course to top 20 million globally in 2025, marking a significant milestone for the automotive sector.
This figure translates to one in every four new cars sold this year being electric—a remarkable rise considering the lingering economic uncertainty and political resistance in key markets.
The upbeat outlook comes with caveats. The IEA’s count includes both battery-electric vehicles (BEVs) and plug-in hybrids (PHEVs)—the latter still reliant on gasoline and subject to increasing scrutiny over their actual climate benefits.
Yet the direction of travel is unmistakable: the era of combustion engines is beginning to give way to electrified alternatives. By 2030, the IEA expects 40% of all new cars sold to be at least partially electric, double today’s level.
‘Strong growth path’
Despite geopolitical tension, trade friction, and fluctuating oil prices, growth is occurring. “Electric cars remain on a strong growth path worldwide,” said Fatih Birol, executive director of the IEA. While he warned that global economic shifts and protectionist measures could cloud the outlook, the underlying momentum appears undeterred.
China continues to drive the global shift. The country remains the largest EV market and the world’s biggest manufacturer, accounting for more than 70% of global EV production.
In 2024, China sold over 11 million electric cars, matching the total global EV volume of 2022. Around half of all vehicles sold in China last year were electric or plug-in hybrids, with the latter still popular due to tax breaks and consumer concerns over charging infrastructure.
Price plays a central role in China’s dominance. Two-thirds of EVs sold there are cheaper than gasoline equivalents, even before subsidies. Chinese carmakers are now exporting in force, bringing competitively priced, compact EVs to global markets.
In Europe, where tariffs have been imposed to slow Chinese imports, the influx is still expected to grow. Chinese brands are increasingly promoting plug-in hybrids alongside BEVs as a tactical response to market barriers.
Mixed picture
Europe’s EV market is more fragmented. Growth has slowed following the rollback of subsidies in several countries, with the continent’s EV share stabilising at around 20%. But standout performers remain.
Norway, for example, continues to set the global pace, with EVs accounting for 97% of new car registrations in April. That came as new legislation effectively ended tax advantages for plug-in hybrids, leading to a 95% drop in PHEV registrations that month. The country’s oil demand for road transport has dropped 12% since 2021.
Across the Atlantic, the US picture is mixed. Sales rose 10% last year, aided by generous incentives under the Biden administration. However, with Donald Trump back in office and openly hostile toward electric vehicles, federal support is expected to be dismantled. The IEA has halved its projection for the US. EV market share in 2030 will drop from 40% to 20%.
The shift is gathering pace in the Global South. Last year, EV sales grew by 60% in emerging markets across Asia, Latin America, and Africa. Lower-cost Chinese imports and government incentives are credited for the spike. These regions are fast becoming critical to the industry’s future.
Cost remains a barrier in many developed markets. EVs in Germany and the US still carry a price premium of 20% to 30% over their gasoline counterparts. However, battery costs are falling, and more affordable models are entering the market. The IEA notes that even if oil drops to $40 a barrel, EVs remain cheaper to run, particularly for drivers with access to home charging.
