IEA: Over 20 Million Electric Cars Sold Globally in 2025

With battery costs falling, strict emissions standards being implemented, and an array of affordable models entering the market, particularly from China, the global electric vehicle (EV) industry has moved from being a specialty sector to a mainstream market over the past half decade. The EV sector marked a milestone in 2022 when global sales exceeded 10 million for the first time ever. The industry has now hit another achievement, according to the International Energy Agency (IEA), with 20.7 million EVs sold worldwide in 2025, representing a 20% Y/Y growth. Of all automotive sales globally in 2025, EV sales made up a quarter.

60% of all EVs sold worldwide in 2025 were in China, accounting for 55% of all new car sales in the country. Chinese domestic new energy vehicle (NEV) sales, which includes Battery Electric Vehicles (BEVs) and Plug-in Hybrids (PHEVs), rose by 19% Y/Y to reach 12.86 million passenger cars. For the first time, new energy vehicles officially outsold traditional internal combustion engine cars. Overall, Chinese automakers sold 34.35 million vehicles worldwide, making up a record 35.6% of the global automotive market and overtaking Japan as the leading automotive exporter. This leap in global export primarily comes from demand in South America and Southeast Asia, where auto exports increased by 21% to more than 7 million units.

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Dominating the NEV market in China, BYD Company (OTCPK:BYDDF) accounted for 27% of the market with 3.5 million registrations. With nearly double its EV sales, Geely Automotive (OTCPK:GELYF) secured 12.4% market share.

Source: International Energy Agency

Contrasting with the global trend, EV sales in the United States saw a 4% Y/Y decline in 2025, selling only 1.8 million units, likely due to the Trump administration removing incentives. During the Biden administration, federal tax credits of $7,500 under the Inflation Reduction Act (IRA) were available for new EV purchases. However, after the passing of OBBBA in 2025, these primary federal Clean Vehicle purchase and used EV tax credits were terminated for vehicles purchased after September 30, 2025. This led to a clear pull-forward effect, resulting in double-digit surges in EV sales in the months leading up to the subsidy deadline, followed by a sharp drop.

In the U.S., Tesla’s (NASDAQ:TSLA) EV sales shrank by approximately 7% Y/Y in 2025, with a total of roughly 589,160 units sold compared to 634,000 in the previous year. Despite this, Tesla increased market share from around 43% at the beginning of the year to over 56% by the end, thanks to its resilience after the cessation of federal tax credits. Other automobile manufacturers, including General Motors (NYSE:GM) and Volkswagen (OTCPK:VWAGY), observed significant Y/Y jumps in EV deliveries in 2025, with certain periods seeing over 100% gains. Hyundai also recorded a 45% increase.

In 2025, Europe saw a sharp rebound in sales, with BEVs increasing by 29.7% Y/Y to reach 2.58 million units. This was likely due to strict EU fleet emissions mandates, the introduction of affordable new EV models, and a dramatic rise in fuel prices. The most significant regulatory driver was the EU’s car CO? regulation, which mandated automakers to reduce their average fleet carbon dioxide emissions by 15% compared to 2021 levels. To avoid massive fines, traditional carmakers aggressively promoted EV sales to close compliance gaps. Additionally, the penetration of competitive, lower-cost vehicles from Chinese manufacturers such as BYD, which quickly expanded its European market share, forced the industry to reduce prices. In Germany, the continent’s largest auto market, the average BEV price decreased by about 6% due to the introduction of these cheaper models.

Finally, according to the IEA, EV sales in emerging markets and developing economies surged by approximately 80% in 2025 to nearly 1.2 million units. This was largely due to affordable models from Chinese OEMs, local policy incentives, and increasing energy/fuel costs. In Southeast Asia, sales more than doubled, pushing the EV market share in the region to nearly 20% of all new light-duty vehicle sales, which is more than double the United States’ ~8% share. This increase was largely driven by rapid adoption in Vietnam, Indonesia, and Thailand. In Latin America, sales grew by 75% Y/Y to surpass 350,000 cars, with Brazil and Mexico as the main growth drivers.

In 2025, EV sales in India across all categories reached a record high of 2.27 million, equating to about 8% of total vehicle registrations. This growth was primarily driven by electric two-wheelers and three-wheelers, along with a surge in electric passenger car sales. Electric Passenger Vehicles hit an all-time high of over 176,000 units, a robust 77% Y/Y increase driven by mass-market SUVs. Meanwhile, electric two-wheelers and electric three-wheelers continued to dominate India’s EV sector, making up 57% and 35% of total EV sales, respectively.

By Alex Kimani for Oilprice.com

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