Electric Vehicles Will Exceed 40% Of Global New Car Sales In 2030.

Will Electric Vehicles Exceed 40 Percent Of Global Sales By 2030?

Electric vehicle (EV) adoption is following the classic S-curve of technology diffusion. In 2024, global EV sales exceeded 17 million, surpassing 20 percent of the market for the first time. In the first quarter of 2025, sales increased by 35 percent year-on-year. The International Energy Agency (IEA) states that global EV sales will exceed 20 million in 2025, accounting for more than a quarter of the market, and are on track to surpass 40 percent by 2030. China is the engine of this transition: according to the IEA, China sold more EVs in 2025 than the rest of the world combined.

What Is The Basis For The IEA's 40%+ Forecast?

The IEA's optimistic scenario is based on economic fundamentals such as cost parity and falling battery prices. Lithium-ion battery pack prices dropped to $115 per kWh in 2024, accelerating the break-even point with internal combustion engine (ICE) vehicles. Furthermore, China's production cost advantage and economies of scale are lowering the global threshold. The IEA predicts that if current policies and trends continue, the share of EVs in new sales will exceed 40 percent by 2030.

But Is The Picture Regionally Balanced?

No. While China is advancing rapidly, momentum in the US and Europe has slowed due to reduced incentives and infrastructure deficiencies. For example, Germany eliminated EV subsidies in 2023, and sales declined. In the US, federal tax credits have been limited by protectionist policies. These regional differences suggest that global averages can be misleading.

Why Is Goldman Sachs More Conservative?

Goldman Sachs lowered its 2030 global EV share forecast from 28 percent to 25 percent. The bank predicts that the share of hybrid vehicles (including plug-in hybrids) will increase and that full electric sales will not grow as fast as expected. Their reasoning includes inadequate charging infrastructure, range anxiety, and high electricity prices in some markets. These two extremes. the IEA's 40 percent and Goldman's 25 percent. demonstrate the breadth of the actual uncertainty.

What Are The Counter-Arguments?

Protectionist policies (such as US tariffs on Chinese EVs), inadequate charging infrastructure, and the rise of hybrids could limit the share of fully electric vehicles. Additionally, in some emerging markets, power grids may not be able to meet the increased demand. On the other hand, falling battery prices and China's export pressure could overcome these obstacles and accelerate the global transformation.

Conclusion: Probability and Impacts

This forecast gives a 55 percent probability, standing close to the IEA's central scenario. If realized, internal combustion engine vehicle sales will enter a structural decline globally, and a permanent transformation will begin in the passenger vehicle segment, which represents approximately one-quarter of oil demand. This would profoundly affect oil prices, the automotive supply chain, and energy policies.

Frequently Asked Questions

1. What Conditions Are Required For Electric Vehicle Sales To Exceed 40 Percent By 2030?

Achieving cost parity, the expansion of charging infrastructure, continued declines in battery prices, and the opening of China's production capacity to exports are critical. Additionally, the continuation or revival of incentive policies in the US and Europe is necessary.

2. How Do Hybrid Vehicles Affect This Forecast?

Hybrids are seen as a temporary solution in place of fully electric vehicles. Institutions like Goldman Sachs suggest that the share of hybrids will increase, potentially delaying full electric sales from reaching 40 percent. However, the IEA states that if plug-in hybrids are included in the definition of electric vehicles, the 40 percent mark can be surpassed.

3. How Does This Transformation Affect Oil Demand?

Passenger vehicles account for approximately one-quarter of global oil demand. EVs reaching 40 percent of sales could lead to a reduction in oil demand of 2 to 3 million barrels per day by 2030. This will directly impact OPEC+ policies and refinery investments.