EV And PHEV Sales Could Surge 18% This Year, Hit 20 Million

The global market for battery-electric and plug-in hybrid vehicles is expected to see solid growth in 2025, at least if one research group is correct. According to Rho Motion, sales of EVs and PHEVs could jump 18% this year, surpassing 20 million units for the first time. Strong gains are anticipated in key markets, including the United States, Canada, China, and Europe.

North America’s Growth Faces Political Uncertainty

EV and PHEV sales in the U.S. and Canada could climb by as much as 16% this year, a prediction that might surprise some, given the potential policy shifts under President Trump’s administration. Rolling back fuel efficiency standards and cutting federal tax credits for new and used EVs could put a dent in demand, but for now, the market appears poised to push forward.

Read: EV And PHEV Sales Surged 26% Globally In 2024, But The Party’s Over In Europe

However, Rho Motion believes any legislative changes will take time to make a real impact, meaning 2025 should see continued growth before the effects of new policies begin to slow things down. By next year, combined EV and PHEV sales in the region could exceed 2.1 million units.

Europe Rebounds After Incentive Cuts

The European market, which includes the EU, EFTA region and the UK, also looks set for a rebound after a shaky 2024, when EV and PHEV sales dipped 3%, largely due to Germany pulling back on subsidies. This year, however, sales are expected to grow by 15% over 2024 levels, or 13% compared to 2023.

The boost is likely to come from stricter emissions standards taking effect (effectively forcing carmakers to sell more EVs and PHEVs) combined with the introduction of more budget-friendly EVs, some priced at or below €25,000 (~$26,000). Even with these improvements, automakers may still struggle to hit EU emissions targets, potentially facing hefty fines.

China To Remain EV Hotbed

China is expected to continue to lead the way in EV and PHEV sales, potentially topping 12.9 million units in 2025, representing a 17% rise from the year prior. The country is also expected to tip over the 50% market saturation mark of EVs vs ICEs this year.

“China’s grip on the global market isn’t going anywhere this year with several new plants set to open around the world, expanding its foothold internationally,” Rho Motion head of research Iola Hughes predicts.

“Car manufacturer bosses in the EU will be experiencing some sleepless nights in 2025 as long-anticipated emissions targets come into effect this year and few are adequately prepared with billions of euros of fines on the line. Following his inauguration, President Donald Trump’s legislative agenda is in full swing and though the removal of EV tax credits is going to impact the long-term market, little change will be seen this year as the electrification of vehicles is here to stay,” Hughes added.

For now, the EV market is still climbing, but the real question is how long it can keep up the pace with shifting policies and market shake-ups.