More than one in four cars sold worldwide this year is set to be electric as the sales of electric vehicles continue to break records globally. Global sales of electric cars, which exceeded 17 million in 2024, are on track to surpass 20 million in 2025, according to the Global EV Outlook 2025, released by the International Energy Agency (IEA) on May 14, 2025. Despite uncertainties in the outlook, the share of electric cars in overall car sales is set to exceed 40 per cent in 2030 under today’s policy settings, states the annual publication of IEA.
With this, the global stock of electric cars reached almost 58 million, or 4 per cent of the total passenger car fleet, at the end of 2024, and displaced over 1 million barrels a day (mb/d) of oil consumption that year. By the end of the decade, the report estimated, electric vehicles (EVs) are set to displace over 5 mb/d of diesel and gasoline (petrol) under the stated policies scenario.
“Our data shows that, despite significant uncertainties, electric cars remain on a strong growth trajectory globally. Sales continue to set new records, with major implications for the international auto industry,” said IEA Executive Director Fatih Birol. “This year, we expect more than one in four cars sold worldwide to be electric, with growth accelerating in many emerging economies. By the end of this decade, it is set to be more than two in five cars as EVs become increasingly affordable.”
Global EV Outlook 2025 further estimates that two- and three-wheelers remained the most electrified road transport segment in 2024, with more than 9 per cent of the global fleet now electric. China, India and Southeast Asia, where two- and three-wheelers serve as the primary mode of private passenger transport, remain the world’s largest two- and three-wheelers markets, accounting for 80 per cent of 2024 global sales. India drives most growth in the global electric three-wheeler market. Though the market is highly concentrated, with China and India together accounting for over 90 per cent of both electric and conventional three-wheeler sales, in 2023, India overtook China to become the world’s largest market for electric three-wheelers, and it maintained this position in 2024, with sales growing close to 20 per cent year-on-year to reach 700,000 vehicles. This growing trend looks set to continue thanks to policy support under the new PM E-DRIVE (PM Electric Drive Revolution in Innovative Vehicle Enhancement) scheme, which allocated budget in 2024 to support the roll-out of more than 300,000 electric three-wheelers for commercial use, stated the report.
In the electric car segment, however, China maintains its lead, with markets in Asia and Latin America emerging as new centres of growth. While electric cars accounted for almost half of the car sales in China in 2024, electric car sales in the emerging markets of Asia and Latin America jumped by over 60 per cent in 2024 to almost 600,000—about the size of the European market five years earlier.
On the contrary, the growth in electric car sales slowed down significantly in the US, increasing by just 10 per cent compared to 40 per cent in 2023. In Europe, electric car sales have stagnated with 2024 recording the same sales share as that in the previous year. The share of electric car sales increased in 14 out of 27 EU member states, while it either stalled or decreased in the rest, including in larger markets such as Germany and France.
According to the Global EV Outlook 2025, policy measures have played a significant role in electric vehicle (EV) adoption. Electric car sales in Europe have stagnated as subsidies were phased out or reduced in several major markets. The most abrupt change has been in Germany, which reduced the subsidy of EUR 4,500 per-vehicle to zero in December 2023, and this was followed by a drop in EV market share of 4 percentage points in 2024. France has progressively reduced its subsidy over the years. At the start of 2024, France limited the amount of environmental bonus available to higher-income car buyers and reduced the number of vehicles eligible for the subsidy. Besides subsidies, the policy design of the European Union CO2 standards may also have held back further growth of the electric car market in 2024. As new targets come into effect every five years, car makers had no incentive to push sales of electric cars further in 2024 (in anticipation of strengthened targets in 2025).
In the UK, all subsidies were removed at the end of 2022 but electric car sales have continued to increase, thanks in part to the Vehicle Emissions Trading Schemes, which set targets for zero-emission car sales starting from 2024. In addition, the growth in EV sales was underpinned by a set of tax rebates for company cars, which represented about 60 per cent of total car registrations in 2024.
In the US, a modification to the US Clean Vehicle Tax Credit at the start of 2024 enabled buyers to receive an instant discount (up to US $7,500 for a new electric car and $4,000 for a used electric car) at the point of sale, which may have served to entice interested buyers. However, not all electric cars were eligible for the credit—in 2024 about 20 electric models (not accounting for different trim levels) out of a total 110 were eligible, which translated to over half of US electric car sales—which could be the reason for the modest growth in sales. In January 2025, US President Donald Trump issued the Executive Order 14154, which directs the US government to reconsider market interventions that favour EVs. Legislation has been proposed to end the Clean Vehicle Tax credit for both cars and light-commercial vehicles. A dampening effect on EV sales is expected in 2025 once the tax credit is repealed.
In emerging and developing economies in Asia, Latin America and Africa, the report explained, the rapid growth in electric car sales has largely been strengthened by policy incentives. For instance, tax incentives for electric cars contributed to the doubling of electric car sales in Colombia and Costa Rica in 2024. Developments such as the ban on imports of petrol and diesel cars introduced in Ethiopia at the start of 2024 have resulted in a reported deployment of 100,000 electric vehicles.
However, the report highlighted that while model availability appears to be reasonable in countries like Ethiopia, there are reports that garages struggle to source components for repairs, and that deployment of chargers outside of the capital has not kept pace with electric car sales.
China, where one in 10 cars on roads are electric, has had the largest absolute public spending since 2020. Though its subsidy scheme came to an end in December 2022, after 12 years, other incentives have remained in place. One such incentive exempts electric cars from the 10 per cent purchase tax that applies to other vehicles. In 2024, China introduced a trade-in subsidy with a higher premium for the purchase of EVs. The additional expenditure to support EV purchases is estimated to be around $2.7 billion for 2024.
The report further highlighted that as electric car sales have grown over the past decade, government spending per vehicle, in the form of purchase subsidies and tax incentives, has steadily declined. In 2024, government spending accounted for less than 7 per cent of total spending on electric cars globally, compared to 20 per cent in 2017.