Electric car sales grew by 20% globally to exceed 20 million in 2025, meaning one-quarter of all new cars sold were electric. Europe saw the strongest growth among major electric vehicle (EV) markets, with electric car sales rising by more than 30% to reach 28% of total sales, following an increase in the stringency of the European Union’s CO2 standards for cars. China’s growth in electric car sales slowed slightly, in part due to a temporary halt to its trade-in scheme, but EVs still accounted for nearly 55% of all car sales. In the United States, electric car sales remained relatively stable at just under 10% of car sales, though the end of EV tax credits coincided with a drop in sales at the end of the year. Meanwhile, some emerging markets saw steep increases in electric car sales. In Southeast Asia, annual sales more than doubled to reach a sales share of nearly 20%, led by Viet Nam, Indonesia and Thailand. In Latin America, sales grew by 75%, led by Brazil and Mexico. More than 100 countries recorded electric car sales growth in 2025, and in one-third of these, they represented at least 10% of new car sales. Chinese automakers supplied 60% of global electric car sales in 2025, while European and North American automakers were each responsible for about 15% of global sales.                                                                                                                                         

The ongoing energy crisis resulting from the conflict in the Middle East has brought reliance on oil imports into sharp focus in many countries. The road transport sector represents close to half of oil demand today, and policy responses to the long tail of the current crisis stand to shape the global car market for years to come. The oil crisis of the 1970s prompted the introduction of fuel efficiency standards, which resulted in close to a doubling of the fuel economy of conventional cars between 1975 and today, while during the Covid-19 pandemic, many countries introduced EV subsidies to boost uptake and support a broader economic recovery. In 2025, the global fleet of EVs avoided the consumption of around 1.7 million barrels of oil per day (mb/d), primarily in countries that have implemented fuel economy and CO2 standards, such as China and the European Union. Some countries in Southeast Asia – including Viet Nam, the largest EV market in the region – have already announced plans to expand or extend EV tax incentives as part of their response to the current energy crisis.

The current high oil price environment is drawing consumer attention to the economic benefits of driving EVs. Electric cars generally have lower running costs than internal combustion engine (ICE) vehicles, mainly due to their higher efficiency. The recent rise in oil prices resulting from the conflict in the Middle East has further increased the cost savings associated with driving an EV. For example, based on average oil prices in April, the annual fuel cost savings associated with driving an EV in the European Union grew 35% compared to 2025 savings. For corporate fleets that travel long distances, the running cost savings can be several times larger than for the general consumer. Preliminary signs suggest EV sales are increasing in countries with supply concerns, or where fuel price increases have been particularly steep. However, the full implications of the current crisis will take time to register in the car market, due in part to the lag between vehicle orders and deliveries. For consumers in emerging economies with low rates of motorisation and high sensitivity to fuel prices, electric two- and three-wheelers look to be an attractive option – sales more than doubled year-on-year in the first quarter of 2026 in Southeast Asia, and grew more than 30% in India.

Electric car sales broke records in a number of markets during the first quarter of 2026. Global sales, at around 3.9 million, were 8% lower than over the same period last year, primarily because of lower sales in China and the United States following key policy changes. However, this overall decline masks strong sales growth in many countries: in Europe, sales were up close to 30% year-on-year; countries in Asia Pacific excluding China saw year-on-year sales growth of 80%, and sales across Latin America were up by 75%. In March 2026, around 30 countries saw record-breaking monthly sales, and a further 60 countries recorded year-on-year sales growth. Preliminary April data shows that monthly electric car sales in China grew to a record high of over 60% of total car sales, even if year-to-date electric car sales remained lower than in 2025.  

Global electric car sales are expected to grow to 23 million in 2026, representing 28% of total car sales. Europe is poised for the largest growth among major markets, with sales projected to increase by around 20% in 2026, such that one in three cars sold are electric. In China, electric car sales are set to grow across 2026, albeit at a slower rate than in previous years, to reach almost 60% of total car sales. Sales across Asia Pacific countries other than China are expected to grow by over 50%, while sales in Latin America are projected to rise by 45%. The wider economic impacts of the conflict in the Middle East might temper overall car sales. In many regions, however, there is upside potential to the 2026 EV forecast depending, in part, on how, when and which policies are enacted amid the current energy crisis. 

Even without any new policy announcements, the global fleet of EVs is projected to grow more than sixfold by 2035 from 2025 levels, to reach as many as 510 million, without counting electric two- or three-wheelers. The increasing cost-competitiveness of EVs, along with tighter CO2 and fuel economy standards, are poised to drive market growth, pushing up the share of EVs in global car sales to around 50% in 2035 in the IEA’s exploratory scenarios.1 By contrast, the share of ICE cars continues to shrink in all scenarios, and sales never return to their 2017 peak. In China, 70% of battery electric cars sold in 2025 were already cheaper than the average conventional car; in China’s small car segment, electric cars have already largely displaced sales of conventional cars. This price dynamic helps to push electric cars to exceed 90% of total car sales in China in 2035. In Europe, CO2 standards continue to drive sales of electric cars; in 2025, car manufacturers adjusted their pricing strategies and introduced more affordable EV models to comply with the new emissions targets. Enacting the proposed Automotive Package in the European Union would reduce the 2035 outlook nonetheless, but the sales share of electric cars still exceeds 90%.

Policies and price dynamics are poised to drive EV sales in particular in Southeast Asia, where the share of electric car sales is projected to increase by up to three times by 2035. Imports of affordable electric cars from China have brought down prices and driven up EV sales in many emerging markets in recent years. For example, in Thailand, electric car prices have been on par with those of ICE cars for the past 2 years. In Indonesia, the average price premium for electric cars declined from over 50% in 2024 to around 40% in 2025. Some countries are looking to tighten import rules to support the development of domestic manufacturing, which may affect affordability in the future. Viet Nam is the only country in the region that has a sizeable domestic EV manufacturer offering EVs at prices comparable to those of ICE cars. As a result, Viet Nam could reach an electric car sales share of over 80%, the highest of any Southeast Asian country in 2035.

For countries that rely on imports to meet oil demand, the energy security benefits of rising EV uptake could shape future policy choices. China – the world’s largest oil importer – is also home to the largest stock of EVs, which displaced around 1 mb/d of oil demand in 2025 and is set to displace 2.7 mb/d annually by 2030. Globally, the annual displacement of oil by EVs is on track to triple to around 5 mb/d per day in 2030. Growing deployment of electric trucks – the second-largest oil consuming transport mode – avoids the consumption of 1 mb/d in 2035 based on current policies.

Electric truck sales more than doubled in 2025 compared with 2024, reaching 9% of all truck sales worldwide. The vast majority of this growth came from China, where sales doubled for the second consecutive year in 2025; one in four trucks sold in China was electric. Electric truck sales also grew in Europe and North America, albeit at a much lower level. Electric trucks remain two to three times more expensive to purchase than diesel trucks, but the total cost of ownership (TCO) is already competitive in China thanks to falling battery prices and is coming down in other markets. In Europe, the TCO of electric trucks is expected to reach parity with that of diesel trucks by 2030. To enable electric long-distance trucking, the European Union now has over 1 000 charging points exclusively for electric trucks. Based on current policies, electric trucks are set to constitute at least 20% of global truck sales in 2035, led by sales in China, where they reach a 60% sales share.

New electric truck producers from the machinery and heavy industry sectors are gaining market share in the growing Chinese market. In 2025, almost 30% of the Chinese electric truck market was captured by new market entrants that do not have conventional models in their line-ups. Electric truck sales in China are almost exclusively from Chinese manufacturers with Chinese batteries (with CATL supplying 80% of the total) and truck chassis, reflecting the country’s highly integrated ecosystem and strong local supplier network.

The most electrified road transport segment of all – two- and three-wheelers – continued to grow in 2025. While sales in China and India, the world’s largest two-wheeler markets, grew only slightly in 2025 to a total of 8.4 million, sales doubled in Viet Nam, underpinning global growth. Sales also grew markedly in Africa to reach about 70 000 two-wheelers in 2025 – over 80 times more than at the start of the decade. The sales share of electric three-wheelers stood at over 25%, continuing to increase even as the overall three-wheeler market contracted. 

China remains the world’s largest EV manufacturing hub, accounting for nearly 75% of electric cars produced in 2025. Almost 22 million electric cars were produced globally in 2025 – a more than 25% increase on the previous year. Intense domestic competition in China is squeezing profit margins, pushing manufacturers to seek higher profits overseas. Chinese electric car exports doubled to a record high of over 2.5 million in 2025, as production outstripped domestic demand. In 2024, China overtook the European Union to become the largest exporter of cars; in 2025, more than 35% of China’s car exports were EVs, up from 20% in 2024. Imports from China accounted for 55% of electric car sales in 2025 in countries outside Europe and the United States, up from less than 5% just 5 years earlier. More than half of electric cars sold in Southeast Asia in 2025 were by Chinese brands, while one-third came from a Vietnamese manufacturer.

Around one-quarter of electric cars produced in 2025 were traded between countries. Electric car exports from the European Union grew 25% in 2025, but imports also rose by around 35% year-on-year to more than 900 000; China accounted for almost 60% of these imports. Imports to the United States fell slightly in 2025, with the largest share coming from Mexico. In the first quarter of 2026, electric car exports from China more than doubled compared with the same period in 2025, offsetting weaker domestic sales. Yet Chinese exports could face headwinds in 2026 as inventories build up: in 2025, exports are estimated to have exceeded overseas sales by more than 25%.

China accounted for over 80% of battery cell production in 2025 and even higher shares of production of the active materials in EV batteries. Nearly all battery cells used worldwide are supplied by companies headquartered in China, Korea or Japan, and the market share of Chinese producers is growing especially fast in the European Union, having almost doubled since 2023. However, narrow profit margins are putting pressure on some battery manufacturers, and tightening access to advanced manufacturing production tax credits in the United States could challenge Korean and Japanese battery manufacturers that are heavily exposed to the US market. Despite lithium-ion battery manufacturing capacity growing faster in the European Union and the United States than in China last year, China is set to remain the largest producer of batteries and battery materials to 2035 based on stated policies.

Following the lead of pure-play EV makers, most major automakers are developing vehicles with more centralised software systems that allow key functions and systems to be updated remotely. Battery electric vehicles are currently the most advanced of these “software-defined vehicles” (SDVs), which rely on more centralised control architectures and enable a wide range of vehicle developments, supported by falling prices for sensors, more powerful computing chips and the use of artificial intelligence. Advanced driver assistance systems (such as automated steering and speed control) as well as EV battery management improvements are key applications. The use of autonomous vehicles is also accelerating, with driverless taxis – all of them electric – now operating commercially in more than 20 cities, mainly in China and the United States. However, with new technologies come new challenges: the greater number of semiconductors needed to support increasingly digital and autonomous vehicles means increasing reliance on supply chains that are already geographically concentrated. Further, managing cybersecurity risks will become increasingly important for automakers.

Technological advances are improving EV charging times and creating opportunities to reduce peak demand on the grid. New power‑electronics materials, battery cell technologies and battery pack architectures are enabling charging systems that are more efficient, higher voltage – and therefore faster. The first 1 000-volt models came out in 2025, and announcements of charging times of under 10 minutes have continued into 2026. The number of electric cars able to use chargers above 250 kW represents less than 5% of the vehicle stock, but sales are growing alongside the expansion of ultra-fast and megawatt-scale chargers. As EV deployment and charging speeds increase, grid capacity constraints could become more pronounced in some regions. With no change to current policies, electricity demand from EVs could exceed 1 500 TWh by 2035 – growing around sixfold from 2025 levels. While impressive, this would increase total global electricity demand in 2035 by only about 4%. The impacts vary by region: across Europe, EV deployment in road transport increases total electricity demand by more than 10% in 2035, compared with an increase of under 6% in China. Measures such as smart charging, which reduces peak demand by shifting charging loads, or vehicle‑to‑grid (V2G) – which allows EVs to feed electricity back to the grid – can offer additional flexibility. The first commercial offers for V2G for private EV owners appeared in 2025, although there are few V2G-capable models available, the regulatory landscape for V2G remains fragmented, and standards are not yet clear. Battery innovation is likely to continue: patents related to batteries account for nearly half of all energy-sector patents.