Global EV Sales Hit New Record
The International Energy Agency (IEA) reported in its Global EV Outlook 2026 that global electric vehicle sales reached a new milestone in 2025, exceeding 20 million units, a 20% increase from 2024. EVs' share of new car sales rose to 25%, meaning one in four new cars sold worldwide was an EV. This marked the fifth consecutive year of growth in annual global EV sales since 2021, with an average annual increase of around 3.5 million vehicles. EVs now account for about 5% of the global car fleet, and in 2025 they displaced 1.2 million barrels of oil per day.
Notably, the share of battery electric vehicles (BEVs) in total sales recovered to 65%, reversing the trend of rising share for plug-in hybrid electric vehicles (PHEVs) over the previous two years. Range-extended electric vehicles (EREVs), which grew substantially in 2024, saw their share fall back to below 7% of total sales in 2025.
China: The World's Largest EV Market
China remained the world's largest electric vehicle market in 2025, with annual sales exceeding 13 million units, accounting for 60% of global EV sales. China's EV sales share approached 55%, and monthly sales share surpassed 50% in 11 of the 12 months of 2025, compared with just 5 months in 2024. By the end of 2025, the number of EVs on Chinese roads was estimated at 44 million, about 13% of the total vehicle fleet, up from one-tenth in 2024.
The Chinese market grew rapidly, but the pace of growth slowed. Between 2020 and 2024, EV sales grew at an average annual rate of over 75%, with the sales share rising by an average of about 10 percentage points per year. In contrast, sales growth in 2025 was below 20%, and the share rose by only about 6 percentage points. This was partly due to the temporary suspension of the car trade-in subsidy program in several cities in July 2025 due to funding constraints, which caused sales to fall by 10% month-on-month that month. Despite the brief suspension, the program still attracted 11.5 million applications throughout the year, nearly 60% of which were for new energy vehicles.
Europe: EU CO2 Standards Drive Sales Rebound
After stagnant sales in 2024, Europe saw a strong rebound in 2025. The entry into force of stricter EU CO2 emission standards drove EV sales up by 30% to more than 4 million units. This growth demonstrates that policy regulation plays a key role in accelerating the electrification of transport.
United States: Policy Uncertainty Restrains Growth
The U.S. market showed relative stability in 2025, with EV sales share remaining slightly below 10%. However, sales declined notably in the fourth quarter due to the expiration of the federal tax credit. A series of policy changes created uncertainty about the market outlook, but overall, the U.S. EV market is still making slow progress.
Emerging Markets Accelerate Their Catch-up
In addition to the three major markets of China, Europe, and the United States, electric vehicle sales in other regions are also expanding rapidly. In 2025, EV sales outside the three major markets reached 2 million units, with more than half coming from Latin America, Asia-Pacific, and the Middle East. In some countries, the share of electric vehicle sales has exceeded 10%. For example, Nepal, driven by large-scale imports of Chinese-made electric vehicles, has seen its sales share rise significantly since 2020. The growth of these markets benefits from the scale advantages and cost competitiveness of Chinese electric vehicles.
Outlook and Impact
The global adoption of electric vehicles is having a substantial impact on oil demand and the environment. In 2025, electric vehicles will displace 1.2 million barrels of oil per day, representing a significant component of global oil demand. In addition, the large-scale development of electric vehicles will drive further investment in the battery industry and charging infrastructure. The IEA report emphasizes that policy support, technological innovation, and market openness will continue to determine the development trajectory of the electric vehicle industry in the coming years.