Global electric vehicle sales hit a milestone in 2025 that would have seemed ambitious just a few years ago: one in four new cars sold worldwide was electric, according to the IEA’s Global EV Outlook 2026. Total EV sales topped 20 million units for the year, pushing the global electric share of new car sales to roughly 25 percent.

China remained the dominant force, accounting for more than half of all EVs sold globally. Chinese consumers bought over 11 million electric vehicles in 2025, and domestic automakers (led by BYD) continued to undercut Western rivals on price while expanding their model lineups at a pace that legacy OEMs are struggling to match. The Chinese market’s electric share now exceeds 50 percent of new vehicle sales, a number that would have seemed implausible a decade ago.

Europe held steady as the second-largest EV market, though growth slowed compared to prior years amid a patchwork of policy adjustments and the ongoing debate over 2035 internal combustion engine phase-out timelines. Several member states pushed for carve-outs or delays, creating uncertainty that manufacturers say is complicating long-term investment decisions. The United States ranked third, with EV sales growing despite a shifting federal policy landscape that has introduced new questions around the future of consumer tax credits.

The IEA report underscores a critical split forming in the global market. Emerging economies (including India, Southeast Asia, and parts of Latin America) are seeing faster EV adoption than anticipated. Light commercial EVs also grew sharply, driven by last-mile delivery fleet electrification in urban centers.

Battery costs continued their long-run decline, with pack prices falling further in 2025. The IEA notes that for many segments in China and parts of Europe, EVs have reached or crossed purchase-price parity with comparable internal combustion vehicles without subsidies – a threshold the industry has long treated as the tipping point for mass adoption.

For North American consumers, the picture is more complicated. Inventory has grown, incentive structures remain in flux, and charging infrastructure build-out continues to lag behind sales projections in rural and suburban markets. Affordability at the lower end of the market remains a persistent gap.