The global electric vehicle market has entered a more complex phase. Growth continues, yet the drivers have shifted. Momentum increasingly comes from emerging markets and selected European countries, while parts of North America and China show signs of policy-driven volatility. The result is an EV landscape defined by divergence rather than uniform expansion.
Data from 2025 underline that electrification remains structural. More than a quarter of new cars sold worldwide are now electric, compared with under 3% in 2019. However, where that growth originates, and which manufacturers capture value, has changed markedly over the past year.
Why is Europe still accelerating despite industry headwinds?
Europe remains one of the most stable pillars of global EV demand. In October 2025, battery electric vehicle registrations across Europe (EU, EFTA and UK aggregate) rose by 33% year on year, lifting BEV market share to just over 20%. Plug-in hybrids also expanded rapidly, while internal combustion engine registrations fell sharply.
The European Union shows a similar trajectory. For the first ten months of 2025, BEVs accounted for 16.4% of new passenger car registrations, up from 13.2% a year earlier. Spain, France, Germany, and the Netherlands remain central to that expansion, combining incentives, charging deployment, and broader consumer confidence in electrification.
Europe’s growth also reflects a reshaping of brand dynamics. Chinese manufacturers continue to gain share, with BYD among the fastest-growing brands year to date. At the same time, established European groups have strengthened their electric portfolios. Models such as the Tesla Model Y, Škoda Elroq, and Renault 5 illustrate how competition now spans premium, mid-market, and compact segments.
Yet Europe’s progress is uneven. BEVs remain behind internal combustion and mild hybrid vehicles in total monthly sales. Incremental powertrains still hold volume leadership in several markets, shaping a gradual transition rather than a sudden break.
How have emerging markets become the new growth engine?
The most significant shift in the global EV story lies outside traditional automotive centres. Emerging markets across Asia, Latin America, and parts of Africa are driving adoption at a pace that few analysts expected five years ago. In 2025, 39 countries have passed the 10% EV sales threshold, compared with only four in 2019.
Southeast Asia stands out. Vietnam’s EV sales share has climbed towards 40%, supported by domestic manufacturing and fleet electrification. Thailand has moved beyond 20%, while Singapore continues to exceed 40% penetration. These markets rival several European countries in adoption speed.
Latin America shows a similar pattern. Colombia and Indonesia recorded triple-digit year-on-year growth rates for BEVs in early 2025. Brazil, Mexico, Uruguay, and Costa Rica are approaching EU-average EV shares, driven by urban air-quality concerns, fuel import costs, and access to lower-priced electric models.
For many of these countries, EVs serve strategic goals beyond climate policy. Electrification reduces oil imports, improves local air quality, and supports industrial development. Where electricity grids rely heavily on renewables, efficiency gains translate into substantial fossil fuel displacement.
What role does China play in reshaping global supply chains?
China remains the dominant force on the supply side of the global EV transition. Chinese-made vehicles account for the majority of EV sales in several emerging markets, including Brazil. Export growth since 2023 has flowed disproportionately to non-OECD destinations, accelerating adoption where affordability matters most.
Manufacturers such as BYD, Geely, and Xpeng have expanded aggressively overseas. Local assembly strategies in Southeast Asia aim to bypass trade barriers and build regional supply chains. These moves support right-hand-drive production and shorten logistics routes.
As exports scale, scrutiny has increased. Chinese manufacturers have invested heavily in safety testing, battery certification, and quality assurance to reassure regulators and consumers. Compliance and trust now sit alongside cost advantages.
Why is growth slowing in some advanced economies?
While global EV sales continue to rise, growth has softened in specific regions. Late-2025 data show slower expansion in China and a sharper slowdown in the United States following changes to federal tax credits. These shifts underline the sensitivity of EV demand to policy signals.
Some manufacturers have responded by recalibrating strategies. Investment has shifted towards hybrids, software, and energy storage, particularly in high-cost vehicle segments. This reflects margin pressure rather than retreat from electrification.
Policy uncertainty adds complexity. Proposals in Europe to soften long-term ICE phase-out rules, alongside moves in the United States to relax fuel-economy standards, introduce risk for long-term planning. Markets with stable incentives and charging investment continue to outperform those with shifting frameworks.
What does this mean for the future EV transition?
The EV transition is no longer defined by a single narrative. Instead, it reflects multiple paths shaped by income levels, policy stability, grid composition, and industrial strategy. Emerging markets have moved from followers to leaders, while Europe continues steady expansion.
What remains consistent is scale. More than a quarter of new cars sold globally are now electric, and total EV stocks continue to grow. The next phase depends on where policy clarity, infrastructure investment, and affordability align.
Markets that combine clear regulation with local manufacturing and charging deployment appear best positioned to sustain momentum. The global EV landscape is shifting decisively, and 2025 marks the point where that shift became unmistakable.
