PRESS RELEASE

London and New York, June 18, 2025 – BloombergNEF’s annual Electric Vehicle Outlook (EVO) expects nearly 22 million battery electric and plug-in hybrid vehicle sales this year, up 25% from 2024, as the cost of lithium-ion batteries falls and production of more affordable EV models ramp up. China accounts for nearly two thirds of those sales, followed by Europe at 17% and the US at 7%. Further, plug-in electric vehicles are set to account for one in four vehicles sold globally this year, a remarkable growth from just a few years ago when less than 5% of global vehicle sales were electric vehicles.

Despite the global growth of EV sales, BNEF has reduced its long-term and short-term passenger EV adoption outlook for the first time largely due to the various policy changes in the US. The roll-back of federal fuel-economy standards, the phase-out of the EV tax credit and the potential removal of California’s ability to set its own air quality standards, result in a notable decline in EV adoption in the US, impacting global adoption rates. While passenger EV sales in the US are still projected to rise – from 1.6 million in 2025 to 4.1 million in 2030 – the revised outlook falls short of previous BNEF projections, resulting in 14 million fewer cumulative EV sales over that period.

China extends its lead over Europe and the US as it is the only country where EVs are on average cheaper to buy than comparable ICE vehicles. Demonstrating China’s dominance further, the report finds that 69% of EVs sold globally in 2024 were manufactured in China, with Chinese automakers having a major presence in EV sales in emerging markets like Thailand and Brazil. These sales, paired with an evolving policy landscape in the US, has put adoption in some emerging markets, like Thailand, higher than in the US, challenging the widely held assumption that EVs will start in wealthy countries before spreading further. Outside of China, the UK leads among major car markets and holds the top spot for EV adoption among large countries in Europe, ahead of Germany.

Drawing on BNEF’s team of sectoral and regional experts globally, the report presents two updated road transport scenarios. In the base case Economic Transition Scenario (ETS) – in which EV adoption is shaped by current techno-economic trends and with no new policy intervention – EVs reach 56% of global passenger vehicle sales by 2035 and 70% by 2040, down from 73% in the previous outlook. Despite rapid EV adoption, only 40% of the global passenger-vehicle fleet is electric by 2040 in the ETS, far below what is required to keep road transport emissions on track for the Net Zero Scenario.

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 report finds that while battery demand for EVs is still growing, it is lower than in previous outlooks. BNEF’s battery demand outlook between 2025 and 2035 fell 8% compared to last year’s, equating to 3.4 terawatt-hours fewer batteries – a majority of which (2.8TWh) can be attributed to decreasing passenger EV sales in the US. This dynamic is leading to continued overcapacity, driving battery costs lower and intensifying market competition. In China, average utilization of battery plants is now below 50%. Despite a near-term slowdown, the long-term growth for battery metals remains strong as EVs are adopted more quickly across all segments.

The cost of public EV charging also poses a challenge to widespread EV adoption. While the majority of EV drivers today are heavily reliant on home charging, which is typically 25% to 60% cheaper than gasoline on a per-kilometer-driven basis, public EV charging costs remain high. Public fast charging prices have risen sharply since 2022, especially in the US and Europe, pushing costs per kilometer above gasoline in some cases. As a result, refueling costs are expected to have a growing impact on EV adoption and price parity between EVs and ICE vehicles past the point of sale over time.

“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 from the 2025 Electric Vehicle Outlook include:

• Range-extender EVs (e-REVs) are the fastest growing drivetrain, with sales rising 83% in 2024 to 1.2 million. These vehicles are a variant of plug-in hybrids but are used more like fully electrics, with average battery pack sizes of 38kWh, average electric-only range of 170km, and more than 70% of total distance driven in electric mode.
• Electric truck sales are rapidly growing in China, as government support and subsidies, battery quality, declining costs and heightened manufacturing competition lay the foundation for sustained growth. In BNEF’s modeling, adoption levels for electric commercial trucks in China reaches 46% of sales by 2030.
• Three-wheelers are electrifying more rapidly than other vehicle segments, with EVs making up more than 80% of all sales in 2024. This segment, while small, is the first part of road transport that is broadly on track for the Net Zero Scenario.
• EVs are now a meaningful source of electricity demand, with EVs in China alone now consuming more electricity than a country like Sweden. Electricity demand from passenger and commercial EVs, e-buses and electric two- and three-wheelers is expected to increase 2.4 times from 2025 to 2030.
• Solid-state batteries are now being commercialized and are expected to account for 10% of global EV and energy storage battery demand by 2035. These next-generation batteries offer significant advantages in safety and energy density and are expected to be deployed in high-performance, premium vehicles first. Manufacturers have announced over 830 gigawatt-hours of annual solid-state battery capacity, but only 9.5% of this has been commissioned, and most of this is semi-solid-state technology.
• As the share of EVs in the fleet accelerates, the impact on the oil market is becoming more significant, notably in markets like China and Europe. By the end of 2026, an incremental 1 million barrels per day of oil will be displaced globally compared to 2024. By 2030, road fuel consumption would have been 5.3 million barrels per day higher had every kilometer driven by EVs been driven with an ICE vehicle – more than double the amount avoided in 2024.
• The EV fleet is expected to surpass the size of the ICE fleet in many countries over the coming decades. Norway is projected to reach this milestone in 2030, followed by China in 2033, California in 2037 and Germany in 2039. This transition will boost revenue from public charging in Europe and North America, increasing from around $10 billion in 2025 to $220 billion in 2040.

BloombergNEF clients can find the full report and full data viewer on bnef.com and the Bloomberg terminal. The executive summary can be viewed here.

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Alaina Hay
BloombergNEF
ahay38@bloomberg.net

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