IEA: How Sustainability Regulations are Changing EV Growth
EVs in Europe will pay off their carbon debt after about 11,000 miles (18,000km), according to The International Council on Clean Transportation.
Despite some narratives suggesting a slowdown, the global EV transition has continued to accelerate.
The International Energy Agency’s (IEA) Global EV Outlook 2025 confirms that EV adoption is not only maintaining momentum, but also setting new records across multiple markets.
An EV record-breaking start
The first quarter of 2025 saw global EV sales up 35% year-on-year.
EV sales exceeded 17 million globally in 2024, taking more than 20% of global car sales.
More than 4 million EVs were sold in the first three months of the year, led by China, which alone accounted for more than 2.5 million of those sales.
“Our data shows that, despite significant uncertainties, electric cars remain on a strong growth trajectory globally,” explains Fatih Birol, IEA Executive Director.
“Sales continue to set new records, with major implications for the international auto industry.
“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.”
This record growth sets the stage for more than 20 million EVs, both battery EVs (BEVs) and plug-in hybrid EVs (PHEVs), to be sold globally by the end of the year.
This growth of BEVs and PHEVs would represent more than 25% of all new car sales worldwide.
EV adoption around the world
China
China remains the frontrunner in EV adoption, with electric cars expected to make up 60% of all new vehicle sales in 2025.
The country has maintained its lead, with EVs accounting for almost half of all car sales in 2024.
More than 11 million EVs were sold in China in 2024 – more than all global EV sales in 2022.
As a result of continued strong growth, 1 in 10 cars on Chinese roads is now electric.
Government incentives, falling battery prices and a highly competitive domestic market have all contributed to this dominance.
The IEA report states that China’s robust production and export capabilities now account for more than 70% of global EV manufacturing.
The United States
The US is also witnessing resilient growth according to the report.
Despite political uncertainties and proposed changes to federal incentives, EV sales in the US are projected to grow by nearly 10% in 2025, maintaining a double-digit market share.
This significant growth meant EVs accounted for more than 1 in 10 cars sold.
State-level incentives and an increasing range of models are helping to sustain consumer interest, the IEA says.
Emerging markets
In Brazil and Thailand, the influx of competitively priced Chinese EV imports has fuelled significant growth.
Emerging markets in Asia and Latin America are becoming new centres of growth, with EV sales jumping by more than 60% in 2024 to almost 600,000.
This is roughly the size of the European market in 2019.
Brazil saw sales more than double in 2024 and Southeast Asia overall has emerged as an upcoming market, with notable gains in Indonesia and Vietnam.
In Southeast Asia, EV sales grew by nearly 50% to represent 9% of all car sales in the region, with Thailand and Vietnam seeing higher sales shares.
The IEA says that EV sales in Southeast Asia are boosted by strong policy support and available domestic manufacturing capacity.
By 2030, one in four cars sold in the region are poised to be electric with two and three-wheelers representing almost 1 in 3 cars.
In Brazil, the largest car market in Latin America, EV sales more than doubled to 125,000 in 2024, reaching a sales share of more than 6%.
Sales in Africa also more than doubled, mostly thanks to growing sales in Egypt and Morocco.
However, EVs still represent less than 1% of total car sales across the continent.
Across all emerging economies outside of China, Chinese imports made up 75% of the increase in electric car sales in 2024.
In many of these regions, EVs now account for 5–13% of new car sales.
Europe
Europe has seen a relative plateau in EV sales, largely due to the planned phase-out of purchase subsidies.
However, the IEA says that the region continues to lead on infrastructure and regulatory ambition.
EVs account for around 20–25% of all new cars sold and new CO₂ targets from 2025 are expected to reignite growth.
Countries such as the United Kingdom, Norway and Denmark continue to set benchmarks for electrification and policy support.
Emissions standards in the European Union and the United Kingdom will require higher shares of zero-emission car sales in 2025.
In Europe, CO₂ targets support the achievement of a sales share of close to 60% by 2030, slightly below projections from 2024.
“Based on today’s policy settings alone, almost one in three cars on the roads in China by 2030 is set to be electric and almost one in five in both the United States and European Union,” Fatih says.
“This shift will have major ramifications for both the auto industry and the energy sector.”
Electric limitations and long term trajectory
However, the transition is not without its obstacles.
Affordability remains a key barrier in many markets, particularly for lower-income consumers.
In Europe and the United States, BEVs are still priced 20–30% higher than their petrol counterparts despite falling battery costs.
Charging infrastructure, while expanding, is not keeping pace with vehicle adoption in several regions, especially in rural areas and among apartment dwellers without home charging options.
Geopolitical uncertainties, such as tariffs on Chinese EV imports, shifting trade policies and fluctuating mineral prices, also pose potential risks to supply chains and consumer prices.
The environmental benefits of PHEVs are also being questioned, particularly when they are not regularly charged.
The IEA says that their real-world emissions can significantly exceed official test values.
By 2030, the rise of electric mobility is expected to displace more than five million barrels of oil per day, and half of this saving will come from China alone.
Explore the latest edition of Sustainability Magazine and be part of the conversation at our global conference series, Sustainability LIVE.
Discover all our upcoming events and secure your tickets today.
Sustainability Magazine is a BizClik brand
