An electric car charging. REUTERS/Vincent West

The International Energy Agency (IEA) has projected that global electric vehicle (EV) sales will exceed 20 million units in 2025, making up more than 25 per cent of all new car sales worldwide.

This was disclosed in the IEA’s Global EV Outlook Report released on Wednesday. According to the report, EV sales continue to grow despite global economic uncertainties and supply chain pressures facing the automotive industry.

In 2024, EV sales surpassed 17 million, marking the first time electric vehicles accounted for over 20 per cent of total global auto sales. China maintained its dominant position in the EV market, with over 11 million units sold in 2024—equivalent to the total global EV sales in 2022. The report noted that two-thirds of these vehicles in China were priced lower than conventional internal combustion engine cars, despite minimal purchase incentives.

Emerging markets in Asia and Latin America recorded significant gains, with EV sales jumping by 60 per cent in 2024. In contrast, the United States saw a more modest growth of 10 per cent year-on-year, while the European market remained flat due to a reduction in government subsidies and supportive policies.

Data from the first quarter of 2025 indicates that EV sales increased by 35 per cent compared to the same period in 2024, reinforcing the sector’s robust trajectory. The report predicts that by the end of this year, more than one in four vehicles sold globally will be electric.

The IEA attributed this upward trend to declining EV prices and their relatively lower operational costs. The report explained that even if global oil prices were to drop to $40 per barrel, powering an EV via home charging in Europe would still cost half as much as running a conventional petrol car.

IEA Executive Director Fatih Birol stated that electric cars remain on a strong growth path globally, with far-reaching implications for the auto industry. “Our data shows that, despite significant uncertainties, electric cars remain on a strong growth trajectory globally,” he said.

“Sales continue to set new records, and this year, we expect more than one in four cars sold worldwide to be electric. By the end of the decade, more than two in five new vehicles sold are projected to be electric, as affordability continues to improve,” Birol added.

The report, however, cautioned that global macroeconomic factors, such as trade dynamics and industrial policies, could influence the pace of EV adoption going forward.