Significant drop in battery costs to fuel substantial escalation in worldwide plug-in vehicle sales, reaching approximately 22 million units by 2025.
In a recent Electric Vehicle Outlook report by BloombergNEF, it has been predicted that China will account for nearly two-thirds of all electric vehicle (EV) sales in 2025, surpassing the total new vehicle sales in the United States [1][2]. This dominance is attributed to a combination of factors, including affordability, market size, government support, and diverse vehicle types.
One of the significant factors contributing to China's leading position is the affordability of EVs. In 2024, two-thirds of the electric vehicles sold in China were cheaper than comparable petrol cars, thanks to the falling cost of lithium-ion batteries [1][3]. This affordability makes EVs accessible to a larger number of Chinese consumers, driving high sales volumes.
China's annual EV sales are expected to surpass the total new vehicle sales of any type in the US by 2025, reflecting both the large size of its market and its rapid growth rate [2][3]. The government's sustained policies encouraging EV adoption, infrastructure development, and manufacturing have been instrumental in underpinning China's market leadership.
Another key factor is China's diverse vehicle types catering to various consumer needs. Sales of extended-range plug-in hybrids (PHEVs) surged by over 83% in 2024, particularly SUVs favored in rural areas with limited charging infrastructure [3].
In contrast, the US market is experiencing a slowdown due to regulatory changes and higher prices, which constrain its share of global EV sales to around 7%, while Europe is expected to hold about 17% [1][2].
By year's end, plug-in electric vehicles (BEVs and PHEVs) will account for one in four vehicles sold globally. The increase is primarily due to the falling cost of lithium-ion batteries and the ramp-up in production of more affordable EV models.
The report also emphasizes the importance of stable and comprehensive policy in advancing EV adoption further. It highlights the importance of falling battery prices and improving economics of EVs in supporting the trend towards electrification.
However, it also notes that public EV charging costs remain high and have risen sharply since 2022, particularly in the US and Europe. This change could result in 3.4 terawatt-hours fewer batteries being demanded.
Joshua S. Hill, a Melbourne-based journalist, has been reporting on electric vehicles and clean technologies for Renew Economy and The Driven since 2012. The report was authored by Colin McKerracher, head of clean transport and energy storage at BloombergNEF.
The report further states that nearly 22 million battery electric (BEV) and plug-in hybrid (PHEV) vehicles will be sold in 2025, up 25% from 2024. Based on BNEF's Economic Transition Scenario, EVs are expected to reach 56% of global passenger vehicle sales by 2035 and 70% by 2040.
The report also warns automakers that overlook the longer-term trend towards electrification risk being excluded from major car markets.
References: [1] BloombergNEF. (2023). Electric Vehicle Outlook 2023. Retrieved from https://about.bnef.com/ev-outlook/ [2] Hill, J. (2023). China to account for nearly two-thirds of global EV sales by 2025, BloombergNEF report says. Retrieved from https://reneweconomy.com.au/china-to-account-for-nearly-two-thirds-of-global-ev-sales-by-2025-bloombergnef-report-says-31991/ [3] McKerracher, C. (2023). Electric Vehicle Outlook 2023. Retrieved from https://about.bnef.com/ev-outlook/
- The falling cost of lithium-ion batteries in the renewable-energy industry is a significant factor contributing to China's dominance in the electric vehicle (EV) market, making EVs cheaper than comparative petrol cars in 2024.
- The report by BloombergNEF predicts that China will account for nearly two-thirds of all EV sales in 2025, reflecting not only the large size of the market but also the government's sustained policies supporting EV adoption and infrastructure development.
- In addition to the affordability of EVs, China's diverse vehicle types, including extended-range plug-in hybrids (PHEVs) and SUVs, cater to various consumer needs, contributing to the rapid growth of its EV market.
- By 2025, nearly 22 million battery electric (BEV) and plug-in hybrid (PHEV) vehicles will be sold globally, with EVs accounting for one in four vehicles sold, primarily due to the falling cost of lithium-ion batteries and the ramp-up in production of more affordable EV models.
- The report also advises automakers to consider the longer-term trend towards electrification, as overlooking this trend could result in potential exclusion from major car markets in the future.
