The International Energy Agency (IEA) has released its Global EV Outlook 2026. The report shows that the global electric vehicle (EV) market maintained strong momentum in 2025. EV sales hit record highs in nearly 100 countries and regions, rising 20% year-on-year to surpass 20 million units and accounting for one quarter of all new car sales worldwide. Driven by the energy crisis stemming from ongoing conflicts in the Middle East, global EV sales are projected to keep climbing in 2026, reaching 23 million units and making up nearly 30% of total new vehicle sales across the globe.

Thanks to stricter EU CO₂ emission standards for automobiles, Europe emerged as the fastest-growing major market in 2025. Its EV sales surged more than 30% year-on-year, with EVs capturing a 28% market share. The U.S. market remained relatively steady, where EVs accounted for roughly 10% of new car deliveries. Emerging markets delivered particularly remarkable growth. In Southeast Asia, EV sales doubled in 2025, taking a market share of nearly 20%, with robust growth recorded in Vietnam, Indonesia and Thailand. In Latin America, buoyed by strong performance in Brazil and Mexico, regional EV sales jumped 75%.

EV penetration is set to rise further across the world in 2026. Europe is expected to see the largest gain, with EV sales up around 20%. China’s EV market will continue to expand, and its EV market share may approach 60%. EV sales in other Asia-Pacific economies are forecast to grow by over 50%, while Latin America will post a 45% increase. Data indicates that EV sales tend to grow rapidly in countries and regions facing fuel shortages or sharp hikes in oil prices.

Global EV sales stood at approximately 3.9 million units in the first quarter of 2026, down 8% year-on-year. Despite the overall decline, many individual markets posted solid growth. European EV sales rose nearly 30% year-on-year in Q1, sales in the rest of Asia-Pacific jumped 80%, and Latin America saw a 75% increase. In March 2026, EV sales grew year-on-year in almost 90 countries and regions, and around 30 of them set new monthly sales records.

Driven by improving cost competitiveness and tougher CO₂ and fuel efficiency regulations, the global EV fleet is projected to hit 510 million units by 2035, more than six times the figure in 2025. EVs will account for roughly 50% of all new car sales worldwide by then. In contrast, the market share of internal combustion engine (ICE) vehicles will keep shrinking, and their sales are unlikely to return to the peak seen in 2017.

Stricter carbon regulations will continue to boost EV adoption across Europe, where EVs are expected to make up over 90% of new car sales by 2035. In Southeast Asia, supported by favourable policies and increasingly competitive pricing, EVs could claim a 60% share of new vehicle sales by 2035. Vietnam stands out as the only country in the region with a sizable domestic EV manufacturing sector, where EV prices are now on par with ICE vehicles. Its EV market share is projected to exceed 80% by 2035.

Wider EV adoption has delivered significant energy security benefits, especially for oil-importing nations. In 2025, the existing global EV fleet cut oil demand by around 1.7 million barrels per day. By 2030, EVs will displace an estimated 5 million barrels of oil per day globally.

Electrification of road transport is advancing rapidly, led by strong growth in electric truck sales in China. Electric trucks accounted for 9% of global truck sales in 2025, with most of the growth coming from China. Sales also rose in Europe and North America. Currently, electric trucks cost two to three times more than diesel equivalents, but falling battery prices have made them cost-competitive in many markets over their full lifecycle. In Europe, the total cost of ownership for electric trucks is expected to match that of diesel trucks by 2030. By 2035, electric trucks will hold more than a 20% share of global new truck sales.

International trade plays a vital role in the global EV industry. Global EV production reached nearly 22 million units in 2025, an increase of over 25% year-on-year, and around one quarter of these vehicles were traded across borders.

Technological advances and artificial intelligence are reshaping the automotive industry. Battery electric vehicles (BEVs) are at the forefront of the software-defined vehicle trend. Falling sensor costs, more powerful automotive chips and AI integration have enabled streamlined vehicle control architectures and accelerated the development of new features. Major improvements in advanced driver-assistance systems (ADAS) and battery management have also pushed forward the commercial rollout of autonomous vehicles, which are now operating commercially in more than 20 cities, predominantly in China and the United States.

Innovations in power electronics and battery cell technologies have created more efficient charging systems, cutting charging times and reducing peak load on power grids. Less than 5% of EVs currently support chargers rated at 250 kW or above, yet sales of fast-charging EVs are rising rapidly alongside the deployment of ultra-fast and megawatt-level charging infrastructure. Global electricity demand from EVs could exceed 1,500 terawatt-hours by 2035, accounting for only around 4% of the total increase in global power demand over the period. Regionally, EV adoption across road transport will push up electricity demand in Europe by more than 10% by 2035.

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