Electric vehicles (EVs) are an essential part of the transition to a cleaner, greener economy in the fight against climate change.
The technology is also a key driver of demand for battery metals, such as lithium, cobalt, graphite, nickel and copper. Investors interested in these metals are keeping a close eye on the growth outlook for the global EV market.
So what are the key EV trends to follow? Here the Investing News Network (INN) takes a look at what moved the market in 2024, as well as what’s on the horizon for the EV sector in 2025.
However, this growth hasn’t played out equally across the three major regional markets.
Once again China is leading the way, amassing nearly two-thirds of total global sales. Purchases of EVs in this region were up 38 percent to 8.4 million units. Compare this to the 9 percent growth in the US and Canada, and the 3 percent decline in Europe.
With the North American and European EV manufacturers already struggling to gain market share in their own domestic spheres, these cheaper Chinese EV models pose a significant problem.
Despite these challenges, the US EV market landscape has several bright spots. Third quarter EV sales grew by 11 percent year-over-year, according to Cox Automotive. Even Tesla sales returned to growth, up 6.6 percent, and GM sales posted a 60 percent gain for the same period.
“The growth is being fueled in part by incentives and discounts; but as more affordable EVs enter the market and infrastructure improves, we can expect even greater adoption in the coming years,” said Stephanie Valdez Streaty, director of Industry Insights at Cox Automotive.
The European market has also struggled this year, especially in Germany, the largest producer of EVs in this region. The German government cut subsidies for EVs at the end of 2023, which has led to less incentive for buyers in 2024.
Europe’s auto makers are facing a growing challenge ahead of the 2035 ban on the production of any new ICE vehicles. New EV registrations have fallen in the second half of the year, including in France and Italy, while the UK has seen some positive gains, reports Bloomberg.
One of the biggest challenges facing the EV industry is appealing to mainstream consumers, many of which are dealing with high interest rates amidst a cost-of-living crisis.
Range-anxiety, especially in colder climates, long charging times and a lack of reliable charging infrastructure are also significant barriers to EV adoption. But nothing trumps cost.
Overall, PwC found that 75 percent of respondents in Europe, the Middle East and Africa cited the cost of EV ownership as the biggest factor swaying their purchasing decision. On top of that, one-third of EV owners surveyed answered they would consider going back to gas-powered vehicles to avoid the high maintenance costs and limited range for long-distance travel.
Subsidies and tax breaks have helped to ease the cost burden, but pullbacks on those government rebates have hit the market hard in some European countries where high interest rates and cost-of-living continue to put an EV purchase out of reach.
BNEF is forecasting that EV sales worldwide will reach 16.7 million vehicles in 2024, up from 13.9 million the previous year, representing 20 percent of total global vehicle sales this year.
One of the important trends in the EV market for 2024 that is likely to carry on into 2025 is the popularity of hybrid models over pure battery electric vehicles (BEVs). This trend is very much in line with the affordability and range anxiety factors influencing sales in today’s EV market.
The growth in Mexico’s EV industry can be attributed to a number of factors, explained Whitcomb. Namely, its established transport production chains, geographic location, strong position in the traditional global auto industry and trade agreements. “But from an EV standpoint, in particular, the US IRA has been central to stimulating EV production in Mexico,” he added.
“The growth in 2025 will be driven primarily by higher EV sales in China (58%) and Europe (24%), which together are projected to represent 82% of total EVs in use worldwide,” states Jonathan Davenport, Senior Director Analyst at Gartner. In 2025, the firm estimates 49 million EVs will be on Chinese roadways, compared to 20.6 million in Europe and 10.4 million in North America.
Gartner sees China continuing its domination of the global EV landscape for at least another decade. EV Volumes expects BEVs to “gain ground in the BEV-PHEV mix from 2025 onwards” in China as the government offers further financial supports to motivate consumers.
Europe’s light-vehicle EV market will see a growth rate of 22.8 percent in 2025, according to EV Volumes, followed by a further 20.1 percent increase in 2026 and 21.1 percent in 2027. By 2030, the firm sees EVs accounting for 61 percent of the overall light-vehicle market in the region.
The Inflation Reduction Act (IRA) brought forward by the Biden Administration in mid-2022 introduced significant tax credits for EV buyers, helping to take the edge off the cost burden of buying into the clean technology. While the IRA is slated to be in effect through 2032, there are concerns that President Donald Trump may reverse those benefits once he takes office in 2025.
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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