EV sales: Record global growth amid economic uncertainty

In this week’s Power Playbook: This week has seen two big data releases painting a positive picture for the EV industry. Sales are up across the globe, but can the momentum keep up amid economic and tariff uncertainty?

According to the IEA’s Global EV Outlook 2025, more than one in four cars sold worldwide in 2025 will be electric. Indeed, in the first three months of 2025, they say, sales were up 35% year-on-year.

And they’re not the only ones pointing this out.

Rho Motion, a London-based EV research house, also published data this week saying that EV sales are up by 29% for the first third of the year.

All of this is well and good, but how is this growth spread globally?

China dominates as tariffs loom

Unsurprisingly, both sets of data revealed that China has maintained its position as the EV market leader, with electric cars accounting for almost half of all car sales in 2024.

According to the IEA, the number of electric cars sold in the country over the last year (more than 11 million) is equivalent to the total sold worldwide in 2022.

According to Rho Motion, of the 5.6 million sales they spotted, 3.3 million were in China.

The research house says that the Chinese market increased by 35% in January to April 2025, compared to the same period last year.

“Ongoing tariff negotiations are dominating talk in the electric vehicle industry but quietly, domestic manufacturers in China and the EU continue to perform well and grow market share,” commented Rho Motion data manager Charles Lester in a statement.

Trump’s tariffs scare in early April turned the country’s EV industry into collateral damage, reported the Associated Press, and its effects are still a major taking point before the 90-day pause comes to an end.

According to the IEA, uncertainty about the evolution of trade and industrial policy could affect EV uptake as higher tariffs may increase the price of cars. In China, continued political support and competitive EV prices suggest that EV sales can withstand such headwinds.

For Europe too, where price differentials with conventional cars are larger, the combination of longer-term policy ambition and examples of policy responses from the pandemic suggest that sustaining EV sales is possible.

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EU: Gearing up or gearing down?

Rho Motion looks to the EU’s EV prospects through a positive lens.

Said Lester: “The EU is certainly the success story for EV sales in 2025 so far, with emissions targets lighting a fire under the industry to accelerate the switch to electric, they have grown the market by a quarter in the first third of the year.”

According to Rho Motion, the European EV market has grown by 25% in the opening four months of the year, reaching 1.2 million units sold.

Battery EV sales have grown by 29% year-to-date (ytd) as they continue to outpace Plug-in Hybrid Electric Vehicle (PHEV) sales (16% growth) as manufacturers continue to push fully electric sales in order to hit 2025 emission targets.

Several large auto markets continue to grow at a strong pace, with Germany growing by 42% ytd, Italy by 56% ytd, Spain by 57%, and the UK by 32%. France remains down ytd at -14% due to the reduction in consumer incentives.

The IEA however, is not so positive, saying the continent saw sales stagnate in 2024 as subsidy schemes and other supportive policies waned. They do however say the sales share of electric cars remained around 20% as stronger sales in some countries compensated for lower sales in others.

They add that expected growth in EV sales is led by Europe alongside China.

Emissions standards in the EU and UK, they say, will require higher shares of zero-emission car sales in 2025. Such policy pushes are expected to drive up sales in Europe in 2025 to reach a sales share of 25%, despite flexibility given to automakers for meeting the 2025 EU emissions reduction target.

According to the IEA's study, the US saw sales grow by about 10% year-on-year, reaching more than one in ten cars sold. But with the economic uncertainty still imposed by Trump’s trade war, it is difficult to predict the trajectory of their market.

This week Japan’s Honda Motor forecast a 59% profit decrease in the current financial year and said it would put on hold a plan to build an EV supply chain in Canada, amid the uncertainty stemming from Trump's tariffs, reported Reuters.

It seems as though more frequently it is policy and politics determining market leaders and with the tariff pause coming to an end in July, it’s no doubt that the tides will continue to shift.

What do you think? Does Europe stand a chance in these uncertain times and how will China interact with the new trade winds?

Reach out and let me know so that we can feature your thoughts on the Power Playbook.

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

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