BloombergNEF’s (BNEF’s) yearly ‘Electric Vehicle Outlook’ study expects nearly 22-million battery electric and plug-in hybrid vehicle sales – EV sales – this year, up 25% from last year, as the cost of lithium-ion batteries falls and production of more affordable EV models ramps up.

China accounts for nearly two-thirds of EV sales, followed by Europe at 17% and the US at 7%.

Despite the global growth of EV sales, BNEF has reduced its long-term and short-term passenger EV adoption outlook for the first time owing largely to the various policy changes in the US.

The roll-back of federal fuel-economy standards, the phase-out of the EV tax credit and the potential removal of California’s ability to set its own air-quality standards, have resulted in a notable decline in EV adoption in the US, impacting global adoption rates, states the report.

While passenger EV sales in the US are still projected to rise – from 1.6-million in 2025 to 4.1-million in 2030 – the revised outlook falls short of previous BNEF projections, resulting in 14-million fewer cumulative EV sales over that period.

China has extended its lead over Europe and the US, as it is the only country where EVs are on average cheaper to buy than comparable internal combustion engine (ICE) vehicles.

Thailand EV Market Now Bigger than the US EV Market
Demonstrating China’s dominance further, the report finds that 69% of EVs sold globally in 2024 were manufactured in China, with Chinese automakers having a major presence in EV sales in emerging markets such as Thailand and Brazil.

These sales, paired with an evolving policy landscape in the US, have meant that EV adoption is now higher in some emerging markets, such as Thailand, than in the US – challenging the widely held assumption that EVs will start in wealthy countries before spreading further.

Outside of China, the UK holds the top spot for EV adoption among large countries in Europe, ahead of Germany.

The EV fleet is expected to surpass the size of the ICE fleet in many countries over the coming decades.

Norway is projected to reach this milestone in 2030, followed by China in 2033, California in 2037 and Germany in 2039.

Battery Market in Oversupply
BNEF clean transport and energy storage head and lead author of the report, Colin McKerracher, says 2024 was a landmark year for electrified transport, with EVs hitting global sales highs and rapidly increasing adoption from emerging markets across Asia and Latin America.

“Despite these positive tailwinds, we see slower EV adoption in the short- and long-term due in large part to the changing landscape in the US.

“This shift in global adoption will also have major impacts on the battery industry, leading to overcapacity in manufacturing.”

The report finds that while battery demand for EVs is still growing, it is lower than in previous outlooks.

BNEF’s battery demand outlook between 2025 and 2035 has fallen 8% compared with last year’s, equating to 3.4 TWh fewer batteries – the majority of which (2.8 TWh) can be attributed to decreasing passenger EV sales in the US.

This dynamic is leading to continued overcapacity, driving battery costs lower and intensifying market competition.

In China, the average utilisation of battery plants is now below 50%.

Despite a near-term slowdown, the long-term growth for battery metals remains strong.

The report also found that solid-state batteries are now being commercialised and are expected to account for 10% of global EV and energy storage battery demand by 2035.

These next-generation batteries offer significant advantages in safety and energy density and are expected to be deployed in high-performance, premium vehicles first.

EV Charging Costs Rising
The cost of public EV charging is posing a challenge to widespread EV adoption, states the BNEF report.

While the majority of EV drivers are heavily reliant on home charging, which is typically 25% to 60% cheaper than petrol on a per-kilometer-driven basis, public EV charging costs remain high.

Public fast-charging prices have risen sharply since 2022, especially in the US and Europe, pushing costs per kilometre above petrol in some cases.

More Electricity than Sweden

The BNEF report found that EVs are now a meaningful source of electricity demand worldwide, with EVs in China alone now consuming more electricity than a country such as Sweden.

Electricity demand from passenger and commercial EVs, e-buses and electric two- and three-wheelers is expected to increase 2.4 times from 2025 to 2030.

This transition will boost revenue from public charging in Europe and North America, increasing from around $10-billion in 2025 to $220-billion in 2040.