What Next for the Global Car Industry

Present and future prospects of electric car manufacturing

Highlights

  • New market-entrants focusing on electric car production are expanding rapidly. Pure-play electric car makers, especially those from China and US-based Tesla, are capturing a growing share of sales; some 45% of global electric car sales in 2024 are from pure-play electric car makers, compared to 35% in 2019.

Global car sales shares by powertrain and carmaker headquarters, 2019 and 2024

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ICEV = internal combustion engine vehicle; HEV = hybrid electric vehicle; BEV = battery electric vehicle; PHEV = plug-in hybrid electric vehicle. Colours refer to the carmaker headquarters location. Pure-play EV makers include Aiways, BYD Auto, Evergrande, Fisker, Geely NECV Group, Jemmell New Energy, Leap Motor, Li Auto, Lucid Motors, Neta Auto, NIO, Rivian, Seres Group, Tesla, Togg, VinFast, Xiaomi, Xiaopeng, and Yudo Auto.

IEA analysis based on Marklines and EV Volumes.

  • The growth in electric car sales affects both car makers and automotive suppliers, especially those producing powertrains and related components. The automotive supplier market is worth about USD 1.3 trillion, equivalent to over 40% of the global car market. For all components except batteries, companies from advanced economies dominate the market, but for battery-related components, Chinese firms control around 85% or more of global manufacturing capacity.

  • The value added to the economy by the manufacturing of electric cars differs from that of internal combustion engine (ICE) cars primarily with regards to the value related to the powertrain, especially the battery. In regions with supply chains for ICE and electric cars, like Japan and China, the difference in value addition is negligible. In the European Union, however, the difference is large – for ICE cars, over 90% of the engines and parts are produced domestically, compared to just over 40% for batteries and electric car parts. The difference is less pronounced in the United States, which imports both engines and batteries, albeit from different regions.

  • Regions without a battery industry see lower economic value addition, as the battery accounts for around one-quarter of the value of an electric car. Yet most of the economic value of a car comes from assembly and production of non-powertrain components; even in regions where all battery components are imported, the majority of the value is retained. Striking a balance between cost-effective production through imports and domestic value creation is crucial.

Global average share of battery electric car value captured by domestic production for different import scenarios, 2024

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CAM = Cathode active material; AAM = Anode active material. Lithium nickel cobalt manganese oxide 811 (NMC811) and artificial graphite are considered as CAM and AAM, respectively. Domestic supply chain refers to a hypothetical case where every single component of the electric car is produced domestically – automakers typically import at least 10% of their components. The electric car value refers to its final price, which here is assumed to be around USD 30 000. The battery pack size is assumed to be almost 75 kWh. Each percentage associated with the battery supply chain reflects the share of an electric car’s value that is imported for a specific step of the supply chain. Therefore, the percentages reported are additive in case a downstream product which used upstream components produced abroad is imported. For example, importing a battery cell using components and critical minerals not produced domestically would lead to a net loss of 20% (12%+4%+4%) of the electric’s car value. Critical minerals accounts for the cathode and anode materials as well as rare earth elements for the electric motor, but excludes copper. For instance, importing a battery pack implies that the battery cells, CAM, AAM, and critical minerals were produced abroad. Importing the assembled car assumes that the vehicle’s components (motor, power electronics, etc.) are produced abroad. See Annex A for full assumptions and costs used.

IEA analysis based on data from IEA (2025), Global EV Outlook, Bloomberg, BNEF.

  • Available manufacturing capacity for electric cars varies by region, but there is the ample opportunity to retool existing conventional car production capacity. Based on manufacturers’ announcements, production capacity for batteries and key components is set to rise by 40-190% to 2030 relative to today. Despite an increase in the geographic diversity of battery cell production, for most cell components, at least 85% of capacity is expected to remain in China in 2030.

Next Pathways to global EV cost-competitiveness