Umair Gaines
The global electric vehicle market has grown significantly in the past decade, with sales data indicating that it has immense potential. China is the world's largest electric car market in terms of sales and the number of electric cars on the road. China's new EV sales increased by 82% in 2022, accounting for nearly 60% of global EV purchases. Europe is the second-largest market for electric vehicles, with about 11.8 million plug-in passenger cars as of December 2023, accounting for around 30% of the global stock.
| Characteristics | Values |
|---|---|
| Largest electric vehicle market | China |
| Number of highway-legal plug-in passenger cars | 20.4 million units |
| Percentage of global electric vehicle market | 49% |
| Number of electric vehicle exports | 1.2 million |
| Number of electric vehicle registrations in 2023 | 8.1 million |
| Percentage increase in electric vehicle registrations in 2023 | 35% |
| Number of electric vehicles sold in 2022 | 4.4 million |
| Percentage increase in electric vehicle sales in 2022 | 82% |
| Percentage of Chinese considering electric vehicles as their next car in 2021 | 50% |
| Country with the highest market penetration per capita | Norway |
| Number of plug-in cars in Norway | 647,000 |
| Percentage of plug-in cars in Norway as of October 2018 | 10% |
| Percentage of plug-in cars in Norway in 2021 | 22% |
| Country with the highest density of EV charging stations | The Netherlands |
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What You'll Learn
China's EV dominance
China has become the world's largest electric vehicle market, both in terms of sales and the number of electric cars on the roads. The country has been working towards reducing its carbon footprint and promoting electric vehicle (EV) adoption through a series of policies and incentives. This includes subsidies, tax breaks, and a credit system that sets production quotas for automakers. China's extensive network of charging stations has further accelerated the transition to electric vehicles, with the number of EV chargers increasing by 54% from 2022 to 2024, reaching 10.2 million.
China's dominance in the EV sector has boosted its auto industry and positioned it as a leader in climate policy. The country's shift to electric vehicles has been so rapid that it has left the United States and other nations playing catch-up. China's production capacities for active cathode and anode materials are also contributing factors to its EV dominance, with the country accounting for over 90% and 97% of these materials, respectively.
China's EV market offers a combination of performance and affordability, with models like the BYD Seal and the Wuling Hongguang Mini EV redefining consumer expectations. The country's EV manufacturers have rapidly scaled up production and gained a technological edge, benefiting from cost advantages and innovations such as advanced batteries that enable quick charging. As a result, Chinese automakers have surged ahead, leaving US manufacturers struggling to keep up and sending a warning to established EV makers like Tesla, GM, and Volkswagen.
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Europe's second place
China is the world's largest electric vehicle market, both in terms of sales and the number of electric cars on the roads. The Chinese government has implemented policies and incentives to promote electric vehicle adoption, including subsidies, tax breaks, and a credit system for car makers. China's extensive network of charging stations has also accelerated the transition towards electric cars.
Europe is the second-largest electric vehicle market globally, with about 11.8 million plug-in passenger cars as of December 2023, accounting for 30% of the global stock. Europe also has the world's second-largest electric light commercial vehicle stock, with about 290,000 vans. Germany is the leading European country in terms of electric vehicle adoption, with 1.38 million plug-in cars registered since 2010. However, Norway has the highest market penetration per capita and the largest plug-in segment market share of new car sales at 86.2% in 2021. The Netherlands has the highest density of EV charging stations globally as of 2019.
The electric vehicle market in Europe is experiencing significant growth due to various factors. Governments across Europe have introduced subsidies and tax incentives to make electric vehicles more affordable, and the expansion of charging infrastructure has alleviated range anxiety. Technological advancements have improved battery efficiency, and the availability of a wider range of electric vehicle models has increased customer options. The European automotive industry is also undergoing a transformation, with traditional automakers investing heavily in electric vehicle technology, driving competition and innovation in the market.
Europe's share of global battery production is expected to rise to 31% by 2030, with China currently dominating the upstream stages of the value chain for active cathode and anode materials. Europe has set mandatory emission targets for new cars and vans, aiming for a 100% reduction in CO2 emissions by 2035. These factors contribute to the continent's position as the second-largest electric vehicle market in the world.
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US plug-in regional markets
As of December 2023, China had the largest stock of highway-legal plug-in passenger cars with 20.4 million units, almost half of the global fleet in use. China also has the largest electric vehicle market in the world, both in terms of sales and the number of electric cars on the road. The Chinese government has implemented policies and incentives to promote electric vehicle adoption, including subsidies, tax breaks, and a credit system for car makers. China's extensive network of charging stations has also accelerated the transition towards electric vehicles.
Now, focusing on the US plug-in regional markets:
California is the largest US plug-in regional market, with 1 million plug-in cars registered by November 2021, which increased to 1.77 million by 2023, representing 46% of the national stock. The state's plug-in segment market share has also increased over the years, reaching 12.8% in 2021. The nine states that follow California's Zero-Emission Vehicle (ZEV) regulations accounted for another 10% of the American stock.
The US plug-in electric vehicle market share has been steadily increasing, rising from 0.14% in 2011 to 9.1% in 2023, surpassing the 1 million sales mark for the first time. New-vehicle sales are projected to reach 16.3 million units in 2025. The US Environmental Protection Agency has also implemented stringent emissions and fuel economy requirements for internal combustion engine-powered vehicles, with tougher standards in the future. By 2035, 100% of all new vehicles sold in the US will be required to be electric.
In 2023, electric car registrations in the US totalled 1.4 million, a 40% increase from 2022. The revised Clean Vehicle Tax Credit and electric car price cuts contributed to this growth, with some popular EV models becoming eligible for credit. For example, sales of the Tesla Model Y increased by 50% in 2022 after qualifying for the full USD 7,500 tax credit.
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Norway's market penetration
As of 2023, China is the country with the largest electric vehicle market in terms of sales and the number of electric cars on the road. China has been pushing towards electric mobility, implementing policies and incentives to promote electric vehicle (EV) adoption, including subsidies, tax breaks, and a credit system for car makers. China's extensive network of charging stations has also accelerated the transition towards electric cars.
Norway, however, has the highest market penetration per capita in the world for electric vehicles. In 2023, about 90% of all cars sold in Norway were electric, including battery-electric vehicles (BEV) and plug-in hybrid electric vehicles (PHEV). Norway's fleet of electric cars is one of the world's cleanest, as almost all of its domestic electricity comes from hydropower.
Norway has been incentivizing green travel for several years, offering toll-free travel, electric roads, priority parking, and exemption from purchase taxes and annual road taxes for electric vehicles. These incentives have made electric car purchase prices competitive with conventional cars. As a result, Norway achieved its transportation emissions target three years ahead of schedule, with average fleet CO2 emissions falling from month to month.
The market penetration of electric vehicles in Norway has been steadily increasing over the years. In March 2014, Norway became the first country where over one in every 100 registered passenger cars was plug-in electric. By March 2015, the plug-in segment market penetration passed 2%, and by September 2016, the all-electric segment achieved a market penetration of 3.5%. In October 2018, over 10% of all passenger cars on Norwegian roads were plug-ins, and this rose to 22% in 2021.
While the EV market in Norway continues to mature, there is a shift towards smaller and more affordable electric cars. Norway's statistics bureau, OFV, suggests that economic factors are influencing consumer preferences for smaller and more moderately priced vehicles. This trend is expected to impact future car sales, potentially challenging long-established brands in the country.
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Germany's sales decline
As of December 2023, China had the largest stock of highway-legal plug-in passenger cars with 20.4 million units, almost half of the global fleet in use. China also has the world's largest plug-in light commercial vehicle and electric bus deployment. China's leading position in the electric vehicle market can be attributed to its efforts to combat pollution and reduce its carbon footprint. The Chinese government has implemented various policies and incentives to promote electric vehicle (EV) adoption, including subsidies, tax breaks, and a credit system for carmakers.
Now, onto Germany's sales decline:
Germany, the leading European country with 1.38 million plug-in cars registered since 2010, has experienced a significant decline in electric vehicle (EV) sales in recent years. In 2024, Germany's EV sales plunged by 27.4%, with only 380,609 new battery-electric vehicles (BEVs) sold. This sharp decline can be attributed to the German government's decision to scrap incentives and subsidies for EV buyers and manufacturers, with local buyers losing incentives of up to €4,500, and manufacturers losing incentives of €2,250. This abrupt end to subsidies caused a slump in EV market share, dropping to just 13.5%.
The German government's decision to phase out these subsidies was controversial and had a significant impact on the country's EV sales. Germany's economy was already struggling, and the high purchase costs of electric vehicles further deterred buyers. Petrol-powered cars remain the most common powertrain type in Germany, with a 35.2% sales share, while electric vehicles accounted for only 25% of sales in 2023, down from 30% previously.
The decline in EV sales in Germany is particularly notable given its position as Europe's largest and most important car market. This trend has significant implications for the country's goals of reducing transport emissions and its target of having 15 million pure electric cars on the road by 2030. With only about 1.4 million registered electric vehicles nationwide as of 2025, Germany faces an uphill battle to achieve its emissions reduction targets.
However, there is potential for a shift in the German market as citizens head to the polls in February, and a new government may offer increased support for electric vehicles, with parties proposing various incentives and subsidies to promote their adoption.
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Frequently asked questions
China has the largest electric vehicle market in the world. In 2023, the number of new electric car registrations in China reached 8.1 million, increasing by 35% compared to 2022. China also has the largest stock of highway-legal plug-in passenger cars with 20.4 million units, almost half of the global fleet in use.
The United States is the second-largest market for electric vehicles, with cumulative sales in the US totaling 4.74 million plug-in cars since 2010.
Germany has the largest stock of plug-ins in Europe, with cumulative sales of 1.38 million plug-in cars registered since 2010.
Norway has the highest electric vehicle market penetration per capita in the world. In 2021, over 10% of all passenger cars on Norwegian roads were plug-ins, rising to 22% in 2021.
The Netherlands has the highest density of EV charging stations in the world as of 2019.
