How will a Trump presidency impact the global EV market in 2025 and beyond?
06 January 2025
What did 2024 mean for the electric vehicle (EV) market? How will political changes, such as the return of Donald Trump, impact forecasts? Neil King, head of forecasting at EV Volumes, presents the latest global outlook with Autovista24 special content editor Phil Curry.
Once all registration data has been accounted for, the global light vehicle market, made up of passenger cars and light-commercial vehicles, is forecast to grow by 2.2% in 2024.
The latest information from EV Volumes shows a rise from the previous 0.9% forecast in September. This is thanks to improved figures in China, offsetting downgraded results in Europe and the non-Triad region.
The global EV share forecast has been upgraded to 20.4%, accounting for battery-electric vehicles and plug-in hybrids (PHEVs). This is up from 19.7% in September, with EV sales forecasted to grow by 25% across 2024.
The latest forecast of more than 17.7 million EV sales globally in 2024 is just over 800,000 units higher than EV Volumes predicted in September. However, the improved volume outlook for China cannot compensate for the downgrades to Europe, Northern America, and the non-Triad region in the longer term.
The global impact of Trump
The global EV volume outlook is lower in 2028 compared to September’s forecast. Plug-ins are expected to account for 33.9% of all sales worldwide, down from 34.1% in the previous report.
This is due to assumed changes to the US Inflation Reduction Act (IRA) with Donald Trump resuming the presidency. However, EVs are still forecast to account for 44.8% of light-vehicle sales in 2030, and 69.4% in 2035.
This year, the global electric light-vehicle market is expected to improve by 17%. This is a slowdown in growth as the market adapts to challenges in the year. The market faces tariffs on BEVs built in China and slower consumer demand. However, the share of EVs in the market will improve, up to 23.1%.
The number of EVs in operation is increasing rapidly, but their share of the total light-vehicle fleet is developing with a considerable delay. With 1.3 billion light vehicles on the road today. Assuming normal scrappage rates, EV Volumes forecasts it will take until 2042 for half the global fleet to be electric.
Uncertainty brews in North America
The automotive market recovery in North America is slightly stronger than anticipated by EV Volumes in September. This was aided by the US Federal Reserve cutting interest rates. Levels were lowered by 50 basis points in September, 25 basis points in November, and 50 basis in December.
The 100% import duty applied to EVs from China is not having a dramatic impact. This was anticipated as it only affects a few models. Measures came into effect in the US from 1 August and from 1 October in Canada.
Nevertheless, the rollout of the Volvo EX30 has been postponed until later this year. Additionally, the new Mini Cooper Electric will not land until 2026. Brands producing their EVs in China, such as Lynk&Co, Nio, Smart, and Zeekr, are unlikely to launch in Northern America until they relocate production.
EV Volumes has held its EV share forecast for 2024, at 10.3%, with growth of 13%. However, there is now far greater uncertainty about development of EV adoption in the US after the re-election of Donald Trump as president.
The Trump effect
Four key policy areas could be impacted by Donald Trump’s return. This includes a federal charging standard and funding for the National Electric Vehicle Infrastructure (NEVI).
Consumer tax credits from the IRA and the ‘leasing loophole’ could be affected. Tariffs and import duties on vehicles, even those sourced from Mexico and Canada, could be impacted. California may enforce stricter emissions standards, which have been adopted by several other states.
This means that forecasting EV adoption in North America is especially challenging. EV Volumes will need to make assumptions about policy changes and then quantify their impact.
At present, the assumption is that the IRA leasing loophole will be closed at some point in 2025. Higher import duties will apply from 2026, regardless of a vehicle’s origin. It is also assumed that the IRA will be diluted, if not entirely withdrawn, from 2028.
With these assumptions, EV Volumes expects the electric share of light-vehicle sales in North America to reach 12.8% in 2025. This is down from the 13.5% forecast in September. This share will then reach 39.2% in 2030, a fall from the previous 39.7% forecast. Meanwhile, 2035 will see a share of 70.7%, down from the previous expectation of 71.8%.
BEVs are still expected to account for 78.6% of EV sales in 2024. However, they are now projected to rise to 81.2% in 2025 (down from 82.4% forecast in September). Figures will climb to 93% in 2030 (down from 93.6%), and 96.6% in 2035 (down from 97.2%).
Europe’s challenges continue
The European light-vehicle market has faced considerable challenges in recent years. These seemed to be at an end in 2023 when deliveries improved by 13.9% year on year. However, cost-of-living increases and high interest rates have impacted the market in 2024. EV Volumes forecasts a 1.1% improvement across the full year.
This is slightly lower than the 2.4% improvement in September’s forecast. At 14.9 million units, this falls far short of the 18 million light vehicles registered in Europe in 2019. Moreover, EV Volumes does not see the European market returning to this level during the current forecast horizon, to 2035.
The EV market has seen increased challenges in 2024. Alongside the removal of incentives during 2023 in key markets, there were subsidy changes last year too. France lowered its subsidies last year. It then removed them completely for vehicles imported into Europe in January and for company-car buyers in mid-February. The country reduced the incentive amounts again at the end of November.
In January 2024, Switzerland completely removed the 4% import tax exemption for BEVs. Although Italy introduced a new incentive scheme in May 2024, the total funds dedicated to BEVs were fully depleted within a day.
Tactics at play
New CO2 regulations are due to coming into force in 2025. So, some carmakers may have pushed internal-combustion engine models more towards the end of last year. This would stop these vehicles from counting against their emissions totals for 2024. At the same time, holding back any low and zero-emission models into the first part of this year would reduce fleet CO2 levels.
With import tariffs on BEVs built in China, 2024 has proven difficult for the European EV market. EV Volumes forecasts a 4.8% decline in electric light-vehicle sales in Europe for 2024. This equates to over three million units, just 20.3% of all light-vehicle sales, down on the 21.3% share achieved in 2023, and even lower than the 2022 share of 20.7%.
This year looks brighter, however. Countries such as Spain and Poland are considering the revision of EV purchase subsidies. More affordable BEVs, such as the Citroen e-C3 are rolling out. Furthermore, global EV-leader BYD has expansion plans for the region alongside other Chinese OEMs.
EV Volumes expects a return to growth for the region in 2025. This is thanks to the rollout of new EVs, lower prices, and the implementation of more ambitious CO2 emission targets. EVs are predicted to gain a 24.7% share, as registrations improve by 25.2%. The share will rise to 61.6% in 2030, and 93.3% in 2035.
PHEVs boom in China
EV Volumes has again increased Chinese light-vehicle market forecast for 2024, to just under 25.8 million units. This equates to a 3.9% year-on-year growth. 2022 saw a boom in EV sales in China. This means the targeted 20% share of new-energy vehicles (NEVs) by 2025 was reached three years early.
The country has seen an uptick in PHEV sales over the last few years. The powertrain accounted for 18% of all EVs sold in 2021, claiming a 32% share in 2023. This was largely caused by high sales growth of BYD PHEVs and Li Auto extended-range electric vehicle (EREV) SUVs. Unsurprisingly, other Chinese OEMs are rolling out countless new PHEVs, which exacerbates their appeal.
EV Volumes forecasts that the powertrain capture a 42.5% share of the EV mix in 2024. However, with government plans to support the uptake of cleaner technology, the 2035 share outlook of EVs has been increased. BEVs are expected to gain ground against PHEVs from 2026 onwards.
In 2024, the EV market is forecast to improve by 37.6%, with the technology taking up 44.9% of all registrations in the country. Growth is expected to slow in 2025, with a 10.5% increase equating to around 12.8 million units. This would give the electric light-vehicle market a share of 48.8%.
In 2030, this is forecast to increase to 70.5%, reaching 86% in 2035. Growth rates could suggest even faster electrification of the market. EV Volumes remains cautious as regulatory and economic uncertainties remain high.
Non-Triad trails
Electric light-vehicle numbers in the non-Triad markets rose sharply for the third consecutive year in 2023, albeit from a low base.
Demand is increasingly supported by a wider availability of products, higher incentives, and lower import tariffs in some countries. EV sales in the non-Triad markets exceeded one million units in 2023, with growth of 82%.
The plug-in growth forecast for the region in 2024 has been lowered to 28.1%%, with the overall light-vehicle market expected to rise by just 0.4%. This is due to weakness in countries including Japan and South Korea.
However, governments are introducing measures to strengthen their currencies and stimulate consumer demand. This should support vehicle sales going forward.
Thailand, for example, has lowered the interest rate for automotive loans. The September and November cuts in the US interest rate should also have positive consequences for multiple economies.
EV Volumes slightly reduced the EV share for the year to 4.6%, which translates into just below 1.3 million deliveries. BEVs are, however, expected to perform slightly better in the EV market than anticipated in September.
For 2025, the EV market is expected to improve by 39.3%, equating to over 1.8 million units. The share is predicted to rise to 6.1% this year, before improving to 17% in 2030, and reaching 41.8% in 2035. This means the non-Triad region will trail global EV adoption by five to six years.
Many developing countries impose high tariffs on vehicle imports. Unless they exempt EVs, they will need to develop their own EV industry to catch up with adoption in mature markets.
