Electric vehicles are set to overtake internal combustion engine (ICE) sales worldwide. Trends towards their uptake indicate that regulation alongside growing sustainability efforts will make them a favorable choice among OEMs and consumers.
IDTechEx’s report, “Plug-in Hybrid and Battery Electric Cars 2025-2045: Technologies, Players, Regulations, Market Forecasts,” explores the possibility that 2025 will bring new opportunities to resume steady market growth after a slower period.
Recent EV Figures and Stricter Regulations
The car market is the most significant transport sector, with approximately 90 million vehicles sold worldwide in 2023. 14.4 million electric vehicle sales were made in 2023, jumping to 18.1 million in 2024, highlighting a fast-growing market with room for EV manufacturers to establish themselves further.
The desirability of EVs is further amplified by the growing awareness of sustainable technologies, as explored in IDTechEx’s sustainability report portfolio, and the different regulations across numerous economies pushing to reach net zero. In the EU, 2035 will bring about an ICE ban, with rules tightening in 2025 and then in 2030. Many companies are likely to improve EV sales to avoid fines.
Battery electric vehicles (BEVs) are the best solution to reducing carbon emissions across the transport sector because they produce zero tailpipe emissions. Their presence is already well-established. BEV production is also primarily responsible for contributing to lithium-ion batteries, electric motors, and power electronics demand.
Trends for the Future of the EV Market
IDTechEx’s report covers some of the ongoing trends expected from 2025 and beyond, such as lower-cost models beginning to emerge and EVs entering the mass market. So far, electric vehicles outside of China have primarily been in the premium luxury segment, according to IDTechEx, but with regulation dates getting closer, the landscape is likely to change. This will also become more likely as battery and production costs stabilize, allowing vehicle prices to follow.
Charging infrastructure for BEVs and PHEVs is still somewhat limited, though it is growing and becoming more widespread to accommodate the rise of EVs on the road. In 2023, IDTechEx reports that there were almost 4 million public charging points worldwide, with 1.2 million installed the same year.
Approximately 219 million will be necessary by 2035 to meet the demands of growing numbers of electric vehicles. Global investments into charging infrastructure goals are expected to exceed US$104 billion by 2035, highlighting the worldwide interest in enabling the growth of these vehicles.
PHEVs are currently gaining popularity, which IDTechEx suggests could be due to the lack of charging infrastructure. This is due to consumers’ need for security when switching to electric and the potential unavailability of charging points.
However, even these vehicles will eventually be replaced by BEVs following regulations and restrictions on tailpipe emissions.
IDTechEx’s Outlook for EVs and Manufacturers
PHEVs have mainly seen a massive uptake in China, the largest market for EVs globally, while electric pickup trucks in the US are beginning to see adoption. This showcases sustainable swaps already being made and paves the way for electric vehicle adoption to become normalized.
Manufacturers must also increase their EV shares over the next ten years, particularly in Europe. This may be done somewhat reluctantly due to the initial potential for a decrease in profits, though it will be necessary for economies to reach decreased carbon emission goals.