The Global EV Outlook 2025 report

20/05/2025

Significance: GS III; Environment; Climate Change; Reports;

Why in the News?

The International Energy Agency’s (IEA), “Global EV Outlook 2025″ was released that highlighted the worldwide electric vehicle (EV) trends, including surging sales, technological advancements, infrastructure growth, and evolving policies.

The report spotlights India’s remarkable lead in the electric three-wheeler market, a crucial segment for sustainable urban mobility in developing economies.

Major Key Highlights of Global EV Outlook Report 2025

Global electric car sales (battery-electric and plug-in hybrids) surpassed 17 million units in 2024, with projections to exceed 20 million in 2025.
Over 25% of new cars sold worldwide in 2025 are expected to be electric, compared to just 9% in 2021.
Nearly 58 million electric cars are now on the road, making up about 4% of the world’s passenger vehicles.
Regional Trends

China: Continues to dominate, producing about 70% of new EVs and accounting for nearly half of global EV sales. Almost 50% of new cars sold in China are electric.
Europe: Remains a strong market, exporting over 800,000 EVs in 2024.
United States: Sold 1.6 million EVs in 2024 (10% of new car sales), but growth is slowing due to policy headwinds.

Indian Scenario:

India maintained its position as the world’s largest market for electric three-wheelers for the second year in a row, with sales rising nearly 20% to about 700,000 vehicles in 2024.
Despite a 5% shrinkage in the overall global 3W market, electric 3W sales grew by more than 10%, surpassing 1 million vehicles in 2024. India and China together account for over 90% of global 3W sales (electric and conventional).
India’s electric 3W sales share hit a record 57% in 2024, up 3% from the previous year. In contrast, China’s electrification of 3Ws has stagnated below 15% for three years.

How are electric 3-wheelers more efficient than traditional fuel-based vehicles?

Parameters	Electric 3-Wheelers	Fuel-Based (Diesel/Petrol) 3-Wheelers
Energy Efficiency	Electric 3-wheelers have a tank-to-wheel efficiency of around 70–80%. This means that 70–80% of the energy from the battery is actually used to move the vehicle.	Diesel and petrol 3-wheelers have much lower efficiency, only about 25–35% of the fuel’s energy is used for movement; the rest is lost as heat and noise.
Operating Cost	Much cheaper to run, with fuel (electricity) costs around ₹0.54 per km and total operating expenses (including maintenance) about ₹0.96 per km. Over 8 years, total ownership costs are nearly half those of a diesel 3-wheeler, saving up to ₹7.85 lakh (about 45% less).	Higher running costs, with fuel expenses alone around ₹3.75 per km and total operating expenses about ₹4.36 per km. Maintenance is more frequent and expensive due to more moving parts and regular servicing needs.
Performance	Offer higher acceleration and smoother handling due to instant torque and direct drive (no gears or clutch). Well-suited for city and short-distance travel; recharge time is a factor for longer trips.	Generally have longer range per refuel and can be refueled quickly, making them preferable for long-distance or rural routes. Slower acceleration and more vibration/noise compared to electric models.
Maintenance and Durability	Fewer moving parts mean less frequent repairs and lower maintenance costs. Main maintenance is battery replacement, but overall reliability is higher.	Require regular servicing (oil changes, filter replacements, exhaust repairs), leading to higher downtime and costs.
Environmental Impact	Produce zero tailpipe emissions, helping reduce air pollution and carbon footprint, especially important in urban areas.	Emit CO₂, NOx, and particulate matter, contributing to air pollution and health problems.

What are the major factors behind India’s leadership in the Electric 3-wheeler market?

Strong Policy Support and Government Initiatives: India’s government has actively promoted electric 3-wheelers through targeted subsidies, schemes like FAME II, PM E-DRIVE, and production-linked incentives (PLI).

- These measures make electric 3-wheelers more affordable, encourage local manufacturing, and set ambitious targets for commercial deployment, driving rapid market expansion.

Economic and Operational Advantages: Electric 3-wheelers offer much lower running and maintenance costs than petrol or diesel models, which is crucial in India’s price-sensitive market. Their affordability and cost-effectiveness make them highly attractive for daily use, fleet operators, and last-mile delivery services, boosting widespread adoption.
Urbanization, Last-Mile Connectivity, and Market Acceptance: Rapid urban growth and the need for efficient, affordable last-mile transport for both passengers and goods have made 3-wheelers essential in Indian cities.

- Electric 3-wheelers are now widely accepted and used in both urban and rural areas, with the segment achieving over 57% EV penetration in 2025.

Environmental and Technological Drivers: Rising fuel prices, growing concerns about air pollution, and climate change have pushed both consumers and policymakers toward cleaner transport options.
- Indian manufacturers have responded with innovative, locally tailored electric 3-wheelers featuring improved battery technology, longer range, and expanding charging infrastructure, further strengthening market growth.

What are the Global challenges and uncertainties?

US Policy Headwinds: Recent political changes in the US have led to reduced policy support and slower growth projections. The IEA now expects EVs to make up only about 20% of US car sales by 2030, down from previous forecasts of over 50%.
Supply Chain Issues: Persistent supply chain challenges, especially in critical minerals and battery manufacturing, could slow the pace of EV adoption if not addressed.
Global Competition: The gap between leading (China, Europe) and lagging (US, some emerging markets) regions is widening, raising concerns about global competitiveness and industry leadership.

Why is this change significant?

EVs displaced over 1 million barrels of oil per day in 2024 and are projected to displace over 5 million barrels per day by 2030, significantly impacting global oil demand.
The continued growth of EVs is essential for achieving net-zero emissions targets and combating climate change.
By 2030, under current policies, EVs are expected to represent more than 40% of global new car sales, with further increases possible if governments strengthen support and infrastructure investment.

Conclusion: The “Global EV Outlook 2025” reveals a rapidly transforming automotive landscape. While China and Europe lead in electric car sales and technology, India stands out as the global leader in electric three-wheelers and a fast-growing two-wheeler market, driven by strong policy support and dynamic industry growth.