Electric vehicle (EV) adoption continued its upward trajectory in 2024, with global sales reaching a record 17 million units. EVs accounted for more than 20 percent of total car sales — up from just 1 percent in 2015 — highlighting a decade of rapid electrification in the automotive industry. While growth remains strong overall, trends vary significantly across regions, according to the International Energy Agency (IEA) report.
China: Market Leader with Accelerated Growth
China led the global EV market, capturing nearly two-thirds of global sales in 2024. Government policies, extended incentives, and a robust domestic manufacturing ecosystem helped nearly double EV sales compared to 2022. Projections indicate that 60 percent of new car sales in China in 2025 will be electric — far surpassing the country’s original 2035 target of 50 percent.
Europe: Uneven Momentum Amid Policy Shifts
Europe saw mixed results. Although EVs comprised about 20 percent of all car sales, the continent experienced its first annual sales decline in over a decade. The drop was mainly due to subsidy reductions in key markets:
Germany saw a sharp decline after phasing out incentives in late 2023.
France trimmed grants in 2024 and plans additional cuts in 2025.
UK bucked the trend, becoming the largest EV market in Europe with a 20 percent sales increase.
Belgium led in growth, with EV sales tripling due to favorable company car tax reforms.
To restore momentum, the European Commission is pushing for revisions to tax policies across member states.
United States: Growth Slows Amid Affordability Challenges
In the U.S., EV sales reached 1.6 million units in 2024 — about 10 percent of total car sales. Although nearly triple the volume of 2021, the pace of growth has slowed significantly:
2022: +56 percent
2023: +42 percent
2024: +11 percent
Contributing factors include high interest rates and a lack of affordable EV options. In 2024, only two battery electric vehicles (BEVs) were priced under $30,000, compared to over 50 internal combustion engine (ICE) models in the same bracket.
Emerging Markets: Rapid Growth from a Small Base
Emerging and developing economies (excluding China) posted the fastest EV growth globally—sales quadrupled in 2024 versus 2022. However, their overall market share remains small.
Latin America: Registrations more than doubled year-on-year, with Brazil accounting for nearly two-thirds of the total. Low-cost Chinese EV imports were a major catalyst.
India: Over 90,000 EVs were registered in 2024, nearly doubling 2022 levels. The rise was driven by central schemes like FAME II, the PM E-Drive initiative, and generous state subsidies.
Despite the surge, affordability continues to be a critical factor. In China, low-cost EVs are now cheaper than ICE vehicles. In contrast, EVs remain about 40 percent more expensive in the UK and 30 percent in the U.S., though the gap is narrowing.
Outlook: Investment and Affordability Key to Sustained Growth
While policy support continues to fuel EV momentum — especially in China and parts of Europe — the global market is becoming increasingly fragmented. Advanced economies are contending with subsidy fatigue and cost barriers, while emerging markets are seeing a promising uptake from a lower base.
Total investment in clean transport in emerging markets, including EVs and rail, is projected to reach $35 billion by 2025 — a modest figure compared to the $110 billion spent annually on fossil fuel subsidies over the past decade. The future of EV adoption will depend heavily on targeted investments, availability of affordable models, and coherent policy frameworks that support long-term consumer and industry confidence.
Baburajan Kizhakedath