Electrification: As the world makes tracks, Europe backtracks

2025 is ending on a high note for the global electric vehicle market, which is expected to surpass the 18.5 million sales figure recorded in November. These volumes represent a 25% increase compared to the same period in 2024. Thus, more than a quarter of total global sales of new vehicles involve these electrified technologies (BEVs and PHEVs). Until now, the drive towards electrification has been led by China and Europe, but it has now spread to all regions. In 2025, electric vehicles will account for more than 10% of the market in 39 countries, including 12 outside Europe. Six years ago, only four European countries had exceeded this threshold! Asia is emerging as the most dynamic continent in terms of the transition. China is a powerful driving force, with a penetration rate of over 50% and still accounting for nearly two-thirds of global electric vehicle sales. But even more significantly, a radical transformation is underway among its neighbours.

Now a manufacturer, Vietnam has doubled its market share of electric vehicles since 2024 to reach nearly 40% in 2025... almost exclusively in VinFast models! Thailand has crossed the 20% market share threshold (compared to 1% in 2019). And in Indonesia, one of the top 10 countries where Chinese exports are booming, electric vehicle penetration has reached 15%. This is the result of a government policy to reduce VAT on the purchase of electric vehicles and import duties for manufacturers who commit to opening production sites in the country by 2026. On the other hand, the electrification of the vehicle fleet is likely to take longer in India, a country of two-wheelers, where penetration is expected to account for less than 3% of sales, albeit with a 57% jump in the volume of electric cars sold between 2024 and 2025. Some Latin American countries are also pursuing a proactive policy. For example, the penetration rate of electric vehicles reached 27% in 2025, 17% in Costa Rica, and Colombia and Brazil (see p.73) exceeded 10%. And, of course, Chinese brands dominate in these countries, which represented significant growth opportunities in 2025, against a backdrop of drastically reduced exports to the US, with four key countries: Brazil, Mexico, the United Arab Emirates and Indonesia. We can also mention Turkey (see p.78), which has pushed ahead with electric technologies, boosted in particular by its national brand Togg, with a 6% increase in sales in 2025, representing 44% of total sales. Here again, we can see the effect of the ‘magic wand’ of the government's tax relief initiative in this segment, with the hope of bringing to fruition the industrial installation project on the territory of Chinese leader BYD. 

While emerging countries are aggressively catching up in terms of electrifying their vehicle fleets, enthusiasm is much lower in countries considered to be ‘developed’. In Japan, home to Toyota, the leader in all categories of hybrids as well as Kei Cars, electric vehicles have a 3% market share that has not grown since 2019. The United States is doing only slightly better, with a market share of around 7% (source: S&P Global). This momentum has been slowed by the end of the federal tax credit, but also by Trump's openly anti-electrification policy, which has lowered the CAFE (corporate average fuel economy) standards.

And then there is Europe, which includes the champion of electromobility with Norway and its 94% penetration of electric vehicles in total sales, followed by its neighbours Denmark (64%), Finland and Sweden at around 35%. At the other end of the spectrum, Southern and Eastern Europe are between 5% and 8%. In between, Germany and France are reporting around 18% penetration. In total, the European market is estimated at 3.8 million electric vehicles sold in the first nine months of 2025, with an average penetration rate of around 16%. The EU-27 is committed to a proactive decarbonisation trajectory... but has just revised its ambitions downwards and backtracked on its goal of ending the production of combustion engine vehicles by 2035.
Under joint pressure from several Member States, led by Germany, and the automotive industry (see p.66), Brussels is proposing to relax the zero-emission target by allowing up to 10% of combustion engine or hybrid vehicles to be included in the plans. This is a pragmatic decision that will save the European automotive industry by at least loosening the noose, especially as the European Commission is affirming its support for ‘Made in Europe’ products through the requirement for local content in production (see p.22). This flexibility is welcome in that it gives traditional manufacturers extra time, but it also risks permanently uncoupling European industry from the electric mobility train, which, whatever anyone says, will continue on its path globally.