The electric vehicle market in 2025 is set for continued expansion led by China’s rapidly growing demand and exports, even as several global regions face policy-driven hurdles. Industry observers underscore the importance of consistent public charging infrastructure, manageable price points, and coherent government mandates to ensure sustainable EV adoption over the coming year.
Evolving Policies and Market Trends
In 2025, the electric vehicle (EV) market is expected to expand significantly, with China leading both demand and production. However, changing policies and discontinued subsidies in multiple countries are creating uncertainty and could potentially slow progress. Concerns about charging infrastructure and high upfront costs may also pose barriers to widespread EV adoption.
Sales momentum remains policy-driven. Fastmarkets’ research forecasts around 17 million passenger EVs sold globally in 2024, with 65% bought in China. China’s growing export base continues to supply EVs to Asian countries, solidifying its leadership position. Meanwhile, Europe is projected to reach 3–3.1 million sales in 2024, aided by smaller nations offsetting underperformance in Germany and France. The UK has seen significant EV sales spikes, supported by substantial manufacturing investments. However, manufacturers argue that without further government policy clarity—such as adjustments to the Zero Emission Vehicle mandate—these growth rates are not fully sustainable.
European EV demand is anticipated to dip briefly in January but should rebound over the year, driven by new emissions regulations. Experts point to similarities with earlier sales slumps in China and Germany when EV subsidies abruptly ended, suggesting such disruptions often prove temporary as markets adjust.
France is cutting subsidies for higher-income brackets, which might slow sales, but new, more affordable electric models from local brands could help sustain demand. Meanwhile, the US is projected to sell around 1.5 million light EVs in 2024. There is widespread expectation that the incoming Trump administration will reduce or remove tax credits introduced under the Inflation Reduction Act, which has already seen mixed results for EV purchases. Potential tariffs on vehicles from China, Canada, and Mexico could add to price pressures, with some analysts suggesting the US EV market in 2025 may struggle to match 2024 figures.
China’s domestic EV sales rose by 31% in the first nine months of 2024. Although growth may slow somewhat as Chinese manufacturers focus on export markets, the country’s larger automakers continue to expand plug-in hybrid EV (PHEV) and extended-range EV (EREV) offerings. China’s official mandate of 20% clean vehicles by 2025 is already well below its existing EV market share, highlighting how a strategic government approach and accessible investment drive further industry expansion.
Charging Infrastructure and Global Challenges
Charging infrastructure remains a critical factor worldwide. Belgium’s public charger-to-vehicle ratio improvements correlate strongly with its EV sales jump. At the same time, the rest of Europe reports steady charger growth, aided by government targets. The UK is also expanding its charging network but still faces complaints over broken devices and complicated payment methods. In the United States, public charging has grown consistently under federal initiatives, though the future direction under the incoming administration is uncertain. China’s charger capacity vastly outstrips other regions, including a large number of fast chargers, which contributes to better consumer experiences.
High purchase costs continue to deter broader EV uptake, exacerbated by ongoing consumer concerns over range and charging times. Multiple manufacturers in Europe, the US, and Japan have adjusted their EV strategies, citing profitability challenges. Still, several lower-priced EV models could enter the European market in late 2024 or early 2025, potentially reshaping consumer demand.
China’s edge lies in favorable pricing, low-cost capital, abundant battery materials, and decisive government backing. With substantial export potential and stable demand, China is well positioned to maintain its dominance, even as the broader global EV market grapples with policy uncertainties and evolving consumer needs.
Source: Fastmarkets
