Electric vehicle sales to grow 33% in 2025 to 85m units

• Indian governmental support is making EVs increasingly competitive in terms of affordability compared to traditional petrol or diesel vehicles.
• By 2030, automakers are projected to implement practices that enable the recycling of 95% of EV batteries.
• Ownership of EVs in China is projected to continue to dwarf the rest of the world’s combined installed base through 2025 and likely the next decade.

Electric vehicles (EVs) represent a significant shift in the automotive industry, driven by increasing environmental concerns and advancements in technology.

According to a recent report, it is projected that by the end of 2025, there will be at least 85 million EVs on the roads globally, with India expected to contribute approximately 500,000 of these vehicles. This growth is largely fueled by various government incentives aimed at promoting electric mobility.

Despite facing several hurdles in recent months, the global EV market shows promise for continued expansion. Gartner predicts that by 2024, the total number of EVs in use will reach 64 million units, with a remarkable 33 per cent increase anticipated in 2025.

Globally, battery electric vehicles (BEVs) are expected to dominate the landscape, with projections suggesting nearly 62 million units in operation by the end of next year, reflecting a robust growth rate of 35 per cent.

Challenges ahead

At the same time, plug-in hybrid electric vehicles (PHEVs) are expected to grow at a slightly slower rate and reach an installed base of 23 million units in 2025, up 28 per cent from 2024.

In India specifically, the transition to electric mobility is being accelerated by initiatives such as the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme.

The governmental support is making EVs increasingly competitive in terms of affordability compared to traditional petrol or diesel vehicles.

As noted by Jonathan Davenport of Gartner, Indian consumers are becoming more inclined to adopt vehicles that contribute to improved air quality, thereby aligning consumer behaviour with broader environmental objectives.

However, the rapid increase in EV adoption is not without challenges. The industry faces a potential shortage of raw materials essential for battery production, a concern that necessitates effective recycling strategies.

By 2030, automakers are projected to implement practices that enable the recycling of 95 per cent of EV batteries. Such measures are crucial not only for mitigating raw material shortages but also for addressing environmental sustainability.

Regionally, the ownership of EVs in China is projected to continue to dwarf the rest of the world’s combined installed base through 2025 and likely the next decade. Demand for EVs will steadily grow in Europe and North America, which is projected to account for 36% of global EVs in 2024.

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