Global electric vehicle (EV) sales are forecast to grow by 30% in 2025, reaching 15.1 million units, boosting the sector’s global market share to 16.7%, up from 13.2% in 2024. This growth persists despite some automakers shifting focus to hybrid models.
EV adoption faces regional challenges, but experts remain optimistic about long-term growth. While some manufacturers are adjusting strategies amid uncertainties, demand is expected to remain strong.
India is projected to see a 117% year-on-year increase in EV sales, reaching 7.5% of total vehicle sales by 2025, driven by improvements in infrastructure and policy incentives. In the United States, sales are expected to rise by 36%, securing an 11.2% market share, though this growth will depend on government policies such as tax credits and tariffs.
China, the leading market for EVs, is predicted to see electric vehicles make up 29.7% of the market in 2025, though growth will slow to 20%. Analysts forecast that EVs will outsell internal combustion engine (ICE) vehicles in China for the first time, surpassing government targets. However, fierce competition and oversupply could drive smaller brands out, and foreign automakers continue to lose market share, dropping from 64% in 2020 to 37% in 2024.
In Europe, EV sales are projected to increase by 43%, reaching a 20.4% market share by 2025. While demand in Germany may be sluggish due to subsidy cuts, other parts of Western and Central Europe are expected to counterbalance this. Despite challenges like factory closures and job cuts, overall growth in the European market suggests resilience.
Battery prices are falling, bringing EVs closer to parity with gasoline cars. BloombergNEF reports that battery costs may dip below US$100 per kWh by 2026, with some EVs already cheaper than ICE vehicles in parts of China. By 2030, costs could drop to US$69 per kWh, contingent on adoption rates and policies supporting electric mobility.
However, the market faces challenges like battery oversupply, price wars, and external risks such as geopolitical tensions and macroeconomic instability, which could disrupt supply chains and raise material costs, potentially delaying price parity and slowing EV adoption. The path to price equivalence hinges on continued demand and favorable policies.
