Global electric vehicle (EV) sales are set to maintain strong momentum in 2026 despite geopolitical tensions and energy market disruptions, with worldwide electric car sales projected to reach 23 million units and account for nearly 30 percent of all new car sales globally, according to the latest edition of the International Energy Agency Global EV Outlook report.
The report revealed that global electric car sales surged by 20 percent in 2025, crossing the 20 million mark for the first time. Electric vehicles represented one-quarter of all new cars sold worldwide last year, highlighting the rapid transformation underway in the global automotive industry.
The IEA said nearly 100 countries recorded new EV sales records in 2025, while around 40 countries achieved electric vehicle penetration rates of 10 percent or more of total new car sales. The rapid adoption of EVs is reshaping global transportation, energy consumption, oil demand, and emissions trends.
China Leads Global EV Manufacturing and Exports
China retained its position as the world’s largest EV manufacturing hub in 2025, producing nearly three-quarters of the almost 22 million electric cars manufactured globally. Chinese automakers supplied 60 percent of all electric vehicles sold worldwide, while automakers from Europe and North America each accounted for around 15 percent of global EV sales.
Chinese EV exports doubled in 2025 to more than 2.5 million vehicles as production exceeded domestic demand. Outside the three major EV markets of China, Europe, and the United States, 55 percent of electric cars sold in the rest of the world were imported from China, a dramatic increase from less than 5 percent just five years ago.
China also maintained dominance across EV supply chains, accounting for more than 80 percent of global battery cell production in 2025 and holding even higher shares in the production of critical battery materials.
EV Sales Slow in Early 2026 but Growth Remains Strong in Many Regions
The report noted that policy changes in China and the United States contributed to an 8 percent decline in global electric car sales during the first quarter of 2026 compared with the same period in 2025.
However, the overall slowdown masked strong regional growth trends. Europe recorded nearly 30 percent year-on-year growth in EV sales during the first quarter of 2026. In the Asia Pacific region excluding China, sales jumped by 80 percent, while Latin America posted 75 percent growth.
In March 2026 alone, close to 90 countries registered year-on-year EV sales growth, and around 30 countries achieved record monthly electric vehicle sales.
Southeast Asia Emerges as Major EV Growth Region
The IEA highlighted Southeast Asia as one of the fastest-growing electric vehicle markets globally. Annual EV sales in the region more than doubled in 2025, pushing electric vehicles to nearly 20 percent market share.
The report projected Southeast Asia’s EV market share could surge to 60 percent by 2035, supported by favorable pricing trends and government incentives. Countries such as Vietnam, identified as the largest EV market in Southeast Asia, have already announced plans to expand or extend EV tax incentives to counter the impact of the current energy crisis.
Global EV Fleet Could Reach 510 Million by 2035
The IEA forecasts that the global electric vehicle fleet, excluding two- and three-wheelers, could reach as high as 510 million vehicles by 2035, compared with nearly 80 million today, even without additional policy announcements.
The agency said falling battery prices and concerns over volatile fuel prices are improving EV affordability and strengthening consumer demand across key markets.
Fatih Birol said electric vehicle adoption is helping reduce pressure from the ongoing oil supply crisis triggered by geopolitical instability in the Middle East.
“Electric car sales set new records in close to 100 countries last year. The growing popularity of EVs has marked a major shift for car markets and the energy system as a whole – and it is providing some relief now amid the largest oil supply shock in history,” Fatih Birol said.
Electric Trucks and Two-Wheelers Gain Momentum
The report also found strong momentum in commercial electric vehicles. Global electric truck sales more than doubled in 2025, with China accounting for the vast majority of sales. Electric trucks represented nearly one in ten trucks sold worldwide last year.
The electrification of two- and three-wheelers, already the most electrified transport segment globally, continued expanding in 2025 as governments accelerated efforts to reduce fossil fuel dependence.
AI and Software Becoming Critical in EV Industry
This year’s Global EV Outlook includes a dedicated section examining automotive software and artificial intelligence trends. The report highlights the growing importance of AI-driven vehicle systems, digital platforms, smart charging technologies, and connected vehicle ecosystems in shaping the future competitiveness of EV manufacturers.
The IEA also updated its Global EV Data Explorer and Global EV Policy Explorer tools, enabling users to analyze EV market statistics, vehicle prices, policy measures, and future projections across countries and regions worldwide.
BABURAJAN KIZHAKEDATH