There’s no doubt that the transition to electric vehicles (EVs) is one of the biggest changes in the automotive industry’s history. The forecast for 2025 presents a mix of progress and hurdles, which I believe we need to address collectively if we are to make meaningful strides toward a sustainable future.
EV Sales Are Strong, but Challenges Remain
By 2025, global vehicle sales are projected to reach an all-time high of 97.2 million units. Among these, EVs continue to be the standout performer, expected to grow by 16% to over 19.4 million units. If you look back to 2019, only 3.4% of new car sales were EVs so there has been a significant jump in people’s interest in the last few years. Today, they account for 21.8% of new car sales.
This growth is supported by a combination of factors, including government incentives, discounts, and tightening EV targets for fleet sales. For example, China and the European Union – which collectively account for more than half of global EV sales – are leading the way with mandates like China’s requirement for EVs to comprise 20% of fleet sales by 2025. Even with this progress though, there are still some big hurdles to overcome.
The Geopolitical Issues
Trade tensions are complicating the EV transition. The geopolitical rivalry between major players like the US, EU, and China has led to fractured supply chains and rising input costs. For example, the US Inflation Reduction Act sets restrictions on EVs and batteries sourced from countries deemed “foreign entities of concern,” including China. Meanwhile, China is countering with its own mandates to build up domestic semiconductor production and setting export restrictions on critical EV minerals.
Consumer Resistance and Policy Delays
There is still a large number of drivers who are hesitant to make the switch to an EV. Early adopters have driven initial growth, but mainstream buyers often say that high costs and insufficient charging infrastructure are barriers for them. Policy delays also don’t help. For example, while Norway aims to make all new cars emissions-free by 2025, they are likely to push back targets for vans and heavy commercial vehicles due to technological and logistical hurdles.
Also, the European Union recently delayed the implementation of stricter Euro 7 emission standards until 2028, reflecting the delicate balance policymakers must strike between environmental goals and industry feasibility. Meanwhile, in markets like the US, the outcome of the presidential election could significantly alter the journey of EV adoption.
The Future
Car manufacturers like Tesla have demonstrated that profitability is achievable, and legacy manufacturers are closing the gap, with companies like General Motors and Stellantis on track to turn a profit on EVs this year too. This shift is supported by decreasing commodity prices and economies of scale, which are gradually making EVs more accessible to consumers.
As someone who is very passionate about the preservation and evolution of classic cars, I’m particularly interested in how the lessons from EV adoption can help us bring in sustainable practices within the classic car industry. Synthetic fuels, for example, look to be a fantastic way of maintaining the authenticity of internal combustion engines while significantly reducing emissions. However, more work is needed to make this a viable long-term solution so the EV transition progress is interesting to follow.
Automotive Industry In 2025
The EV transition is a complex but necessary evolution. Whether through EVs, synthetic fuels, or a combination of technologies, the journey toward a greener future is one that will likely require the entire automotive industry to work together.
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