Otis Singleton
Electric and hybrid vehicles are becoming an increasingly common sight on roads around the world. After a slight decline in the first quarter of 2024, the US Energy Information Administration (EIA) reported that the share of electric and hybrid vehicle sales in the United States increased in the second quarter of 2024. This trend is not unique to the US; in Europe, the battery-electric market share stood at 15.2% in February 2025, a rise of 23.7% year-over-year, while hybrid-electric cars also saw a rise of 19%. With the global market for electric and hybrid vehicles growing, it will be interesting to see how this affects the automotive industry and the energy sector in the coming years.
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What You'll Learn
Electric and hybrid vehicle sales in the US
In the second quarter of 2024 (2Q24), the US share of electric and hybrid vehicle sales increased to 18.7% of total new LDV sales, a slight increase from the first quarter (1Q24). This growth was primarily driven by hybrid electric vehicle (HEV) sales, which saw a 30.7% year-over-year increase. Plug-in hybrid electric vehicle sales also showed a slight improvement, while BEV sales accounted for 7.1% of the US market in 2Q24.
The third quarter of 2024 (3Q24) saw another record-breaking quarter for electric and hybrid vehicle sales in the US, reaching 21.2% of total new LDV sales. BEV sales continued to gain traction, with their share growing from 7.4% in 2Q24 to 8.9% in 3Q24. Hybrid vehicles also performed well, making up 10.6% of the US LDV market in 3Q24, the highest ever.
While luxury BEVs have traditionally dominated the market, their share as a percentage of total BEV sales has been decreasing as sales outside the luxury market increase. In 3Q24, 70.7% of BEVs sold in the US were luxury vehicles, compared to 80% in 2023. The average transaction price of BEVs has also been decreasing, falling to $56,351 at the end of 3Q24, about 16% higher than the overall industry average price.
In terms of manufacturers, Tesla remains the leading brand in the electric vehicle market, although its market share has dipped below 50% for two consecutive quarters in 2024. Ford and Chevrolet have also made significant strides in the BEV market, with Ford holding the second-largest share in 3Q24, driven by sales of the Mustang Mach-E and F-150 Lightning models. Chevrolet's sales have been boosted by its newly introduced electric Blazer and Equinox models.
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Electric and hybrid vehicle sales in Europe
Electric and hybrid vehicles are increasing in the EU. In 2023, 48.3% of the 10.7 million new cars registered in the EU were hybrid and electric vehicles. This is a significant increase from the 600 new electric cars registered in 2010 and the 400,000 in 2019. Electric vehicles alone accounted for 22.7% of new car registrations and 7.7% of new van registrations in 2023, with a total of 2.4 million new electric cars registered. This is an increase from 2 million in 2022.
Finland led the EU in adopting hybrid and electric vehicles, with 78% of new registrations in this category. In 2023, the number of battery-only electric passenger cars in the EU countries exceeded 4.4 million, which was about 88 times higher than in 2013 and 12 times higher than in 2018. This increase is due to increasingly stringent regulations that have resulted in the introduction and promotion of more fuel-efficient and less polluting vehicles.
In 2024, hybrid electric sales were up 12.5% year-on-year, while petrol vehicle sales dropped 17.9% to a market share of 29.8% in September. In September 2024, hybrid vehicles overtook petrol-powered vehicles in EU new car sales for the first time, accounting for 32.8% of the total. However, fully electric and plug-in hybrid car sales slowed in 2024, partly due to diverging policies on green incentives among European countries and the imposition of tariffs on cheap Chinese EVs.
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The rise in BEV sales
Electric and hybrid vehicle sales are on the rise globally. In the United States, the share of electric and hybrid vehicle sales increased in the second quarter of 2024, after a slight decline in the first quarter. This increase was driven primarily by hybrid electric vehicle (HEV) sales, which saw a 30.7% year-over-year increase, with plug-in hybrid electric vehicle sales also showing a slight increase. Battery electric vehicles (BEVs) showed slower growth in the first quarter of 2024, but their sales still accounted for 7.1% of the US market in the second quarter.
Luxury vehicles made up a significant portion of BEV sales, with 73.8% of total BEV sales in the luxury market. However, Tesla, the leading manufacturer in the electric vehicle market, saw its market share decrease to below 50% for the first time since 2017. The average transaction price of BEVs in the US decreased from $57,405 in January 2024 to $56,371 in June 2024, according to Cox Automotive.
In Europe, the major markets of Germany, France, and Italy saw overall declines in new car registrations in February 2025, while Spain recorded an increase. Despite this, the market share for petrol and diesel cars declined, with double-digit declines observed in most EU markets. Battery-electric vehicles showed a significant rise of 23.7% year-over-year, while hybrid-electric cars also rose by 19%.
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The performance of luxury vehicles
One of the key advantages of luxury electric and hybrid vehicles is their impressive fuel economy. For example, the 2025 Lexus ES, which tops the list of best luxury hybrid cars in America, offers a combined fuel economy of 44 MPG. Additionally, luxury hybrids can be quicker than their gas-powered counterparts due to the healthy power output of their electric motors. The Lexus ES 300h, for instance, combines high fuel efficiency with luxurious accommodations. Similarly, the Volvo XC60, a small luxury SUV, offers a useful 36-mile all-electric driving range while also delivering on design and amenities.
Luxury electric vehicles are also known for their advanced technology and safety features. For instance, the 2023 Audi e-tron® GT offers Matrix-design LED headlights, X-frame trim, laser lights, and fast-charging batteries. BYD Auto Co., Ltd.'s Han EV series, launched in April 2022, includes luxury sedans equipped with ultra-safe blade batteries that reduce the risk of fires even in severe accidents. These vehicles also integrate advanced technologies that enhance safety, performance, and comfort.
Government initiatives and consumer preferences are also driving the growth of the luxury electric vehicle market. Government policies and incentives, such as tax subsidies, are encouraging consumers to switch to electric models. Additionally, rising environmental concerns and the desire for emission-free, fuel-efficient, and technologically advanced vehicles are influencing consumer decisions. The increasing demand for entertainment, safety, and comfort features, along with the growing number of high-net-worth individuals in emerging economies, is further propelling the demand for luxury electric vehicles.
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The performance of mass-market vehicles
Electric and hybrid vehicle sales are on the rise globally. In the US, the combined sales of hybrid vehicles, plug-in hybrid electric vehicles, and battery electric vehicles (BEVs) increased from 17.8% in 1Q24 to 18.7% in 2Q24. This growth was driven mainly by hybrid electric vehicle (HEV) sales, which increased by 30.7% year over year, with HEV sales making up 9.6% of the total light-duty market in 2Q24. While BEV sales have historically performed better in the luxury segment, manufacturers have been releasing mass-market BEV models and increasing production capacity. However, the Chevrolet Bolt's production halt impacted the mass-market BEV market share in 1Q24.
In Europe, the major markets of Italy, Germany, and France saw declines in new car registrations in February 2025, while Spain recorded an increase. Despite these mixed trends, the battery-electric market share reached 15.2% in February 2025, a notable rise from the previous year. This indicates a growing demand for electric vehicles in the European market.
Mass-market BEVs offer a more affordable option to consumers, making electric vehicles accessible to a wider range of buyers. This accessibility is essential for increasing the market share of electric vehicles and reducing the dominance of traditional petrol and diesel cars. The performance and appeal of mass-market electric vehicles are influenced by factors such as price, range, and charging infrastructure. Improvements in these areas can enhance the competitiveness of mass-market BEVs against their petrol and diesel counterparts.
Additionally, policy interventions and incentives play a role in the performance of mass-market BEVs. For example, the Inflation Reduction Act in the US offers clean vehicle tax credits, encouraging manufacturers to meet domestic content requirements. Such policies can stimulate the production and sales of mass-market electric vehicles, making them more attractive to consumers. Overall, the performance of mass-market electric and hybrid vehicles is influenced by a combination of market, production, policy, and technological factors, all of which contribute to their increasing presence on the roads.
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Frequently asked questions
Yes, the US share of electric and hybrid vehicle sales increased in the second quarter of 2024. Combined US sales of hybrid vehicles, plug-in hybrid electric vehicles, and battery electric vehicles (BEVs) increased from 17.8% in 1Q24 to 18.7% in 2Q24.
Yes, in February 2025, the year-to-year variation showed a rise of 23.7% for battery-electric and 19% for hybrid-electric cars.
In the US, hybrid electric vehicles (HEVs) are the most popular, accounting for 8.6% of the total light-duty market in 1Q24, increasing to 9.6% in 2Q24. In Europe, battery-electric vehicles are the most popular, with a market share of 15.2% as of February 2025.
Tesla is the leading manufacturer in the electric vehicle market, although its market share decreased to less than 50% of the light-duty vehicles sold in 2Q24.
