Introduction
Electric Vehicle Market Expansion: China's Dominance Challenged by Growing Global Demand
Remember when China was the only game in town for electric and hybrid cars? Not anymore! Emerging economies like Brazil, Vietnam, and Indonesia are jumping on the electrification bandwagon, according to the Annual Report by the International Energy Agency (IEA) published last week.
The World Goes Green
Over 17 million electric vehicles were sold worldwide in 2024, accounting for more than 20% of the global market for the first time. In a near 40% surge from the first quarter of 2024, electric vehicle sales increased by 35% in the first three months of 2025. Fatih Birol, the executive director of the IEA, labelled electric vehicles as an integral part of the global automotive industry at a press conference.
Facing Challenges, Aiming for Progress
The road to electric vehicle dominance is not without its obstacles. Risks of a global economic recession, international trade's shifting winds, and potential US tariffs loom. A dip in oil prices could also slow growth. Yet, the IEA emphasizes that electric vehicles have already checked the growth of global oil demand and lessened CO2 and toxic gas emissions.
Gaining Traction in Emerging Economies
The IEA projects that over one in four cars sold globally in 2025 will be electric, and that proportion could reach two out of five by the end of the decade as electric vehicles become even more affordable. In 2024, emerging economies in Asia, Latin America, and Africa saw a 60% increase in sales, nudged by government incentives and plentiful, budget-friendly offerings from Chinese automakers.
Electric vehicles represented 13% of sales in Thailand, 17% in Vietnam, and nearly doubled in Brazil, the ethanol kingdom, to reach 6% of the market.
The Race to the Top
China remains the alpha dog in the EV transition, racking up nearly two-thirds of global sales last year due to competitive pricing. Europe's numbers have plateaued, with a welcome decrease in incentives in some countries and a shortage of budget-friendly options. Although the growth of EVs in the US has slowed, they account for around 10% of market share. The IEA's 2030 forecast for the US was cut in half with Donald Trump's arrival, now standing at a 20% market share.
The Road Ahead
Emerging economies like Brazil, Vietnam, and Indonesia, while not detailed in recent reports, are expected to follow global trends as costs decline and governments implement supportive policies. The future of the electric vehicle market is fueled by price parity with traditional vehicles, government policies, and advances in technology that reduce costs and enhance competitiveness. As these factors continue to evolve, expect more countries to join the race to electric vehicle dominance.
[1] Statista
[2] International Energy Agency
[3] Bloomberg
[4] The Verge
[5] Car and Driver
- Despite China's dominance in the electric vehicle market, the IEA predicts that emerging economies like Brazil, Vietnam, and Indonesia will follow global trends as costs decline and governments implement supportive policies, driven by advances in technology that reduce costs and enhance competitiveness.
- The race to electric vehicle dominance isn't just about powerful international trade politics or government policies; it's also about technology advancements that drive costs down and make electric vehicles more competitive with traditional vehicles, a shift that could have significant political implications for oil-dependent nations.
