QUESTION:
What is the current outlook for electric vehicles?
RESPONSE:
The current outlook for electric vehicles (EVs) is mixed, with both positive growth trends and significant challenges. On the positive side, global sales of electric vehicles, including fully electric and plug-in hybrid models, increased by 21% in January 2025 compared to the previous year[1]. Additionally, the International Energy Agency forecasts that 50% of all cars sold worldwide will be electrified by 2035, pushing the global stock of plug-in vehicles from about 50 million today to more than 500 million[2].
However, there are challenges as well. Tesla, a major player in the EV market, has experienced a significant decline in sales in Europe, with a 49% year-on-year drop in the first two months of 2025, even as the overall market for battery-powered cars grew[3][4]. Furthermore, the outlook for EVs in the U.S. is becoming uncertain due to potential tariffs and policy changes, including the threat to kill tax credits for EV purchases and funding for a national charging network[5].
Overall, while there is strong growth potential for electric vehicles, the market faces hurdles such as policy changes, competition, and regional sales declines that could impact the pace of adoption.
References
[1] Tesla shares plunge 14%, head for worst day in five years [NBC News]
Global sales of electric vehicles, including fully electric and plug-in hybrid models, increased 21% in January from a year ago, even as Tesla’s sales declined. https://www.nbcnews.com/business/business-news/tesla-shares-plunge-head-for-worst-day-five-years-rcna195715
[2] Tariffs And Policy Repeals Could Force U.S. Auto Industry To Fail, Ceding Economic Growth To China [Forbes]
The world increasingly wants vehicles with batteries – one in five cars sold worldwide in 2024 were electric, and the International Energy Agency forecasts 50% of all cars sold worldwide will be electrified by 2035, pushing the global stock of plug-in vehicles from about 50 million today to more than 500 million. https://www.forbes.com/sites/energyinnovation/2025/02/23/tariffs-and-policy-repeals-could-force-american-auto-industry-to-fail-ceding-economic-growth-to-china
[3] Tesla’s EU Sales Plunge 49% Year-on-year In First Two Months Of 2025: Industry Body [Barron’s]
The sales drop came even as overall electric vehicle sales jumped 28.4 percent over the first two months of this year to 255,489 — for an EU market share of 15.2 percent. https://www.barrons.com/news/tesla-s-eu-sales-plunge-49-year-on-year-in-first-two-months-of-2025-industry-body-bbbd7344
[4] Stock market today: Wall Street drifts and Trump Media jumps despite souring moods for US consumers
European sales of Tesla’s electric vehicles dropped by nearly half during the first two months of the year, compared with a year earlier, even as the overall market for battery-powered cars grew, according to the European Automobile Manufacturers Association.
[5] Analysts Expecting The Worst A Week Before Tariff Deadline [Forbes]
For electric vehicles, the outlook is becoming murkier given the segment is not only threatened by tariffs, but by Trump’s stated intentions to kill tax credits for EV purchases and funding for a national charging network. https://www.forbes.com/sites/edgarsten/2025/03/26/analysts-expecting-the-worst-a-week-before-tariff-deadline
