Global EV Sales Set for Record-Breaking Year, Despite US Sales Growth Slowdown

The global electric vehicle (EV) market is on a sharp upward trajectory — and yet, not all regions will benefit equally. According to BloombergNEF’s 2025 Electric Vehicle Outlook (EVO), nearly 22 million battery electric and plug-in hybrid vehicles will be sold worldwide this year, up 25% from 2024. This surge is driven by declining lithium-ion battery prices and a proliferation of affordable new EV models.

China will continue to be the powerhouse of EV adoption, accounting for almost two-thirds of all EV sales. Europe is projected to hold 17% of global EV sales this year, while the United States claims 7%. The overall outlook is promising — nearly one in every four cars sold globally in 2025 will have a plug, a staggering increase from less than 5% of global sales just a few years ago.

A Revised Outlook for the United States

Despite this global momentum, BNEF is trimming its long- and short-term EV adoption projections. For the first time, the firm has reduced its forecasts, especially for the United States. Recent policy mistakes — including the rollback of federal fuel-economy standards, the phase-out of the EV tax credit, and threats to California’s autonomy over emissions standards — have all dampened projected demand. While EV sales in the U.S. will grow to 1.6 million in 2025 and 4.1 million in 2030, BNEF expects 14 million fewer cumulative EVs will be sold by the end of the decade than previously projected.

America’s Mistakes Benefit China

China’s dominance is so pronounced that EVs there are, on average, cheaper to buy than equivalent internal combustion engine (ICE) cars — the only market in the world where this is the case. Chinese carmakers also now manufacture 69% of the EVs sold globally and hold strong positions in emerging markets like Thailand and Brazil. Interestingly, Thailand’s EV adoption rates may soon surpass those of the United States — upending the traditional assumption that wealthier nations would lead the EV transition. As each quarter’s sales numbers are released, China takes a greater share of global automotive sales, decreasing the US share.

Updated Scenarios Highlight Slower Transition

BNEF explores two primary futures for EVs. Its base-case Economic Transition Scenario (ETS) — which reflects existing techno-economic trends without new policy interventions — predicts EVs will comprise 56% of global passenger car sales by 2035 and 70% by 2040, down from last year’s projection of 73% by 2040. Even at that level of new car sales, only 40% of the world’s passenger car fleet will be electric by 2040, a level insufficient to meet Net Zero goals.

Colin McKerracher, head of clean transport and energy storage at BloombergNEF, and lead author of the report said, “2024 was a landmark year for electrified transport, with electric vehicles hitting global sales highs and rapidly increasing adoption from emerging markets across Asia and LatAm. Despite these positive tailwinds, we see slower EV adoption in the short and long-term due in large part to the changing landscape in the US. This shift in global adoption will also have major impacts on the battery industry, leading to overcapacity in manufacturing.”

The more pessimistic adoption curve stems partly from reduced demand in the U.S., and its impact is global. BNEF expects lithium-ion battery demand for EVs will be 3.4 terawatt-hours lower between 2025 and 2035 than it previously estimated. Almost 2.8 TWh of this shortfall is tied to declining U.S. passenger EV sales. Battery factories are running at under 50% utilization in China as a result, keeping prices low and intensifying competitive pressure on cell makers.

The expense of public EV charging is another hurdle to widespread adoption. Today, most EV drivers rely on home charging, which generally costs 25% to 60% less per kilometer than gasoline. However, public charging rates remain steep, and prices for fast charging have surged since 2022 — especially in the U.S. and Europe — in some cases making the cost per kilometer higher than gasoline. Going forward, these higher refueling costs could weigh more heavily on EV adoption and delay the point at which EVs reach total cost parity with internal combustion vehicles.

“Despite significant leaps in EV adoption globally, stable and comprehensive policy still matters in advancing it further, said Aleksandra O’Donovan, head of electric vehicles at BloombergNEF. “Automakers that lose sight of the longer-term trend towards electrification – supported by falling battery prices and improving economics of EVs – risk being squeezed out of the major car markets.”

Other Key Findings

There are also encouraging signs across the EV landscape:

Range-extended EVs (e-REVs) — which offer substantial all-electric range before using a combustion range-extender — are the fastest-growing drivetrain. Sales soared 83% in 2024, reaching 1.2 million units worldwide. These are a variant of plug-in hybrids (PHEVs) but are used more like BEVs, with average battery pack sizes of 38kWh, average electric-only range of 170km, and typically more than 70% of total distance driven in electric mode.

Electric trucks in China are taking off too, with BNEF projecting a 46% adoption rate by 2030. Subsidies, improving battery technology, and cost declines are accelerating this shift.

Electric three-wheelers lead all road transport modes with more than 80% of global sales electrified in 2024. This small but crucial segment is the first to align with the Net Zero emissions pathway.

EV electricity demand is becoming significant. BNEF notes that EVs in China alone now consume more electricity annually than all of Sweden. Electricity demand from EVs across all segments — passenger cars, commercial EVs, e-buses, two- and three-wheelers — is projected to rise 2.4 times between 2025 and 2030.

Solid-state batteries are finally being commercialized. Though most announced capacity is semi-solid-state, by 2035 10% of global EV battery demand will come from solid-state chemistries, which offer safety and energy density advantages.

The oil market is feeling the impact, too. BNEF estimates that by 2030, 5.3 million barrels per day of oil demand will be displaced due to EVs — double the oil savings of 2024. China and Europe will feel this most acutely.

The Road Ahead for EV Adoption

Despite US policy mistakes, the long-term trends remain in favor of electrification globally. BloombergNEF predicts EVs will surpass ICEs in the total fleet in several places — Norway by 2030, China by 2033, California by 2037, and Germany by 2039 — fueling a boom in public charging revenues as these milestones are reached.

EVinfo.net’s Take

BloombergNEF’s 2025 Electric Vehicle Outlook paints a picture of an EV market that’s maturing rapidly but facing some short-term policy headwinds. Growth continues — especially in China — but U.S. policy mistakes will matter greatly for the global trajectory.

Electric trucks, e-REVs, and three-wheelers all signal positive momentum, while advances in battery tech and declining costs will help make EVs more competitive. The long-term outlook is clear: EVs are here to stay, they will displace gas vehicles and oil demand faster than most realize, and the race to electrify is only getting started.

America is making many mistakes regarding EVs, but these are all short-term. Killing the federal EV tax credit and reducing federal support for EV and EV battery production in America, are all reducing America’s ability to compete on the global automotive market, and dragging down the American economy, threatening significant job loss.

Removing California’s ability to control it’s own emissions standards will only increase the harmful effects of global human-caused climate change, creating more harmful smog in California, as well as throughout the nation and the world.

The Genie’s Out of the Bottle, The Cat’s Out of the Bag

Even if US policy mistakes are not corrected, EV adoption in America will keep growing anyway. The reasons are that the cat’s out of the bag, and the genie is out of the bottle, and neither are going back in.

Too many Americans have adopted EVs, and are enjoying the tremendous cost savings. With every new driver adopting an EV, their friends, neighbors and co-workers are encouraged to do the same, hearing about the huge cost savings and many other benefits. EV sales growth will slow down for now, but will no doubt kick back up again. Pressure will grow to stop allowing America to keep falling further behind as the rest of the world moves toward the cleaner air and lower costs that EVs provide.

Gasoline cars will begin disappearing faster than most people realize. According to data from Recurrent, California will have fewer gas-powered cars on the road starting next year — and every year after that — with Colorado and Washington reaching this tipping point by 2026. Reaching 4 million EV and plug-in hybrid sales per year nationwide is enough for gas-powered cars to decline — something projected to occur nationwide as early as 2029.

Our transportation future is battery electric, although it may take a little longer to get there than we previously thought for Americans.