Despite market headwinds, battery electric cars are set to dominate the automotive industry. It is a question of when, not if, they overtake internal combustion engine (ICE) sales globally. This report offers a deep dive into the current slowdown in growth in key regions, as well as a comprehensive analysis of the regulations and policies that will shake up the market in 2025 and beyond.

 

The car market is the largest transport sector, with IDTechEx estimating that over 90 million vehicles were sold globally in 2023. This sector also contributes significantly to road transport greenhouse gas emissions, so there is a strong push to decarbonize vehicles. Battery electric vehicles (BEVs) are the best route to achieving this with zero tailpipe emissions and a well-established market status (over 10 million BEVs were sold in 2023). Electric cars are also a strong driver in the production and development of a host of ancillary products, such as lithium-ion batteries, electric motors, power electronics, and all the advanced and critical materials that go into these supply chains.

This IDTechEx research report contains global market analysis based on extensive sales and technical data. This includes analysis of key, best-selling models, average battery capacity, and motor trends. IDTechEx breaks down the 14.4 million plug-in vehicles sold in 2023 to reveal the underlying trends in this fast-evolving market. Key market aspects discussed include:

The slow growth of the European EV market, and how much of this can be attributed to a poor economic situation in Germany, the bloc's largest market.

The huge success of plug-in hybrid electric vehicles (PHEVs) globally, particularly in China, which now firmly holds the largest EV market in the world.

The emergence of the electric pickup in the US, and how this sector is growing to emulate the successes of the conventional pickup market.

Upcoming major changes in regulations from 2025, particularly in Europe, which mark the beginning of the end for the combustion car.

 

Regulations will drive adoption, and 2025 is a major step towards the 2035 ICE bans

Up until now, the electric car market has primarily been driven by consumer preference and generous government incentives. This has greatly benefitted early adopters, but outside of China EVs have mainly been vehicles in the premium luxury segment. However, the landscape is shifting, particularly in Europe. Governments are withdrawing subsidies, the 'carrot', and replacing them with the 'stick': tougher CO2 regulations. From now on, increasingly large shares of a manufacturer's sales must be zero emission to avoid astronomical fines. For the EU, the next tightening will be in 2025, with a further hike in 2030 before a full ICE ban in 2035. Manufacturers and countries are split on these rules, with some protesting and others acquiescing. In the absence of a major change in regulations, IDTechEx expects that EV sales must be drastically improved next year to avoid billions in fines.

Although Europe has the strictest CO2 policies, the USA also has two sets of regulations from the Environmental Protection Agency (EPA) and California Air Resources Board (CARB). These will drive increased electric car sales in the world's second-largest car market.

 

IDTechEx expects China, the world's biggest car market by volume, could reach the extraordinary milestone in 2024 of 50% of new car sales being 'New Energy Vehicles' (NEVs, incl. BEV and PHEV). This has drastically outpaced the government's expectations, forcing them to adjust the dual-credit system to reflect this. China may have reached a critical mass in EV adoption and now no longer needs to rely on a system of regulation. Plug-in hybrids are proving especially popular in China, as unlike other regions they are treated no differently from a subsidy perspective than BEVs despite essentially being ICE cars with an electric motor.

 

Technology takeaways

Electric vehicle technology is primarily driven by the 'big three' - Li-ion batteries, traction motors, and power electronics.

 

LFP continues its comeback driven by the low-cost segment and the Chinese market.

Not all lithium-ion batteries are the same, although they leverage the same basic chemical principles. Technology diversification has emerged as a key strategy for dealing with supply chain volatility and shortages. EV manufacturers have long been searching for greater vehicle ranges, and many settled on nickel-manganese-cobalt (NMC) type batteries due to their high energy density. However, NMC has shown itself to rely on vulnerable supply chains due to the concentrations of nickel, cobalt, and manganese. These materials are also higher cost, resulting in higher cost batteries. Lithium iron phosphate (LFP) has seen a resurgence in recent years. Initially disregarded for electric car use due to its relatively low energy density, the cathode has seen increased popularity due to a variety of reasons. These include cell-to-pack innovations that allow for a higher pack energy density (offsetting the low cell energy density). Demand for low-cost models, with a smaller required driving range, also presents a positive outlook for LFP batteries.

Market Forecasts

This report contains granular 20-year forecasts & analysis, including:

 Electric car sales by powertrain (BEV, PHEV, FCEV).

 Electric car sales by region (USA, China, Europe, RoW).

 Average battery pack capacities, both historic and forecast

 Li-ion cathode forecasts

 Battery demand forecast for electric cars (GWh)

 Electric car market value (US$)

This report provides critical market intelligence across the electric car markets containing data up to H1 2024.

 

Market analysis, both global and regional

 Global BEV, PHEV, and FCEV sales figures up to H1 2024. Regional breakdowns across Europe, USA, and China. Market growth and penetration rates of electric cars, and sales by manufacturer.

 Major OEMs EV sales and approach.

 Current and upcoming regulations that will affect the adoption of EVs (such as the EUs CO2 limits, EPA and CARB rules, and the dual-credit system).

 IDTechEx assessment of the impact of these regulations on EV sales in 2025 and beyond.

 Granular 20-year forecasts for global car sales by powertrain.

 

Technology trends

 Coverage of the 'big 3' in EVs; batteries, motors, and power electronics.

 Li-ion battery market by cathode chemistry. Outlook for Li-ion batteries, including solid-state batteries.

 Traction motor types, including current market analysis and IDTechEx outlook.

 Power electronics, including the emergence of 800 Volt architecture, silicon carbide (SiC), gallium nitride (GaN).

 Fuel cell electric vehicles (FCEVs),sales performance by regions and IDTechEx market outlook.

 

Forecasts

 20 year forecasts by powertrain (BEV, PHEV, FCEV), regions (USA, Europe, China, RoW), battery demand (GWh), and market value.