Electric vehicle (EV) sales are poised to hit a new global record in 2025, with plug-in electric vehicles expected to account for one in four new passenger vehicles sold worldwide, according to the latest BloombergNEF Electric Vehicle Outlook. However, the U.S. market faces a slowdown as policy shifts and rising costs challenge adoption, while China surges ahead, potentially surpassing total U.S. vehicle sales within the next year.

Global EV Sales Surge, Led by China’s Pricing Advantage

The BloombergNEF report highlights a remarkable growth trajectory, projecting that plug-in electric vehicles will represent a quarter of global passenger vehicle sales in 2025, with China driving more than half of that market. A key factor is pricing: in China, EVs are, on average, cheaper than comparable combustion cars, a trend not seen in other major markets.

This affordability stems from local production and government support, giving Chinese manufacturers a competitive edge. In contrast, buyers outside China, such as in Germany and the UK, still pay a premium—up to 80% in Germany for small EVs and 60% in the UK for large SUVs compared to gas-powered alternatives, based on 2024 data.

Electric Vehicles Set For Record Year As U.s. Adoption Slows, China Leads The Charge

U.S. Market Faces Policy and Cost Challenges

In the U.S., EV adoption is cooling due to policy rollbacks. The BloombergNEF outlook notes, “The US passenger EV adoption outlook is now much lower as EV policies and support are being rolled back.” Passenger electric car sales are expected to rise from 1.6 million in 2025 to 4.1 million in 2030, representing 27% of sales—a significant drop from earlier projections, with cumulative EV sales between now and 2030 cut by 14 million units.

A major caveat looms: the forecast assumes California retains its ability to set emissions standards, currently under legal contention after a Senate vote to revoke its waiver in May. Removing this waiver could further reduce the projected EV share, BloombergNEF warns.

Rising charging costs also pose a hurdle. The report states, “But public fast-charging prices have risen sharply since 2022 in many markets in Europe and the US, pushing costs per kilometer above gasoline and likely discouraging some consumers from switching to EVs.” In the U.S., fast-charging costs have climbed to match or exceed gasoline prices on a per-mile basis (1 kilometer = 0.62 miles), with Europe and the U.S. seeing relative costs approach 150% of gasoline by early 2025, while China remains lower at around 50%.

China’s EV Dominance and Technological Advances

China’s EV sector is thriving, with sales projected to outpace total U.S. vehicle sales by 2026. The BloombergNEF chart shows China’s EV sales rising to 15 million units by 2026, compared to a steady 15 million total U.S. vehicle sales. This growth is fueled by range-extended EVs, a fast-growing segment with sales jumping 83% in 2024 to 1.2 million units, particularly in the SUV category and outside major cities where charging infrastructure is limited.

Additionally, solid-state batteries are on the horizon, offering enhanced safety and energy density. The report notes, “These next-generation batteries offer significant advantages in safety and energy density and are expected to be used in high-performance premium vehicles first,” with 9.5% of announced manufacturing capacity already commissioned, mostly in China.

Industry Trends and Economic Implications

The battery industry faces overcapacity, driving down prices to below $100 per kilowatt-hour globally, though Europe and the U.S. lag behind. BloombergNEF has lowered its battery demand forecast due to U.S. market changes, with plant utilization in China now below 50%.

Planned risk-adjusted lithium-ion cell manufacturing capacity by 2025 is set to hit 3.8 terawatt-hours—more than double the 1.5 TWh global demand expected this year—potentially leading to a 20% price drop in 2024. This overcapacity, combined with economies of scale, could benefit EV owners long-term, but short-term cost increases may deter new buyers.

As the EV landscape evolves, China’s lead and U.S. policy uncertainties will shape the industry’s future. For EV enthusiasts, staying informed on charging costs and technological breakthroughs will be key to navigating this shifting market.