By: Dwight Links
An outlook report by the International Energy Agency (IEA) showed that electric vehicle sales saw an upward trajectory in 2025.
“Electric car sales grew by 20% globally to exceed 20 million in 2025, meaning one-quarter of all new cars sold were electric,” confirmed the agency.
According to the IEA, the recent turmoil in the Middle East created great consumer awareness around the vulnerability of oil, seeing a shift in consumer mobility trends.
“The current high oil price environment is drawing consumer attention to the economic benefits of driving EVs. Electric cars generally have lower running costs than internal combustion engine vehicles, mainly due to their higher efficiency,” the outlook describes.
According to the IEA, the recent rise in oil prices resulting from the conflict in the Middle East has further increased the cost savings associated with driving an EV.
“For example, based on average oil prices in April, the annual fuel cost savings associated with driving an EV in the European Union grew 35% compared to 2025 savings. For corporate fleets that travel long distances, the running cost savings can be several times larger than for the general consumer,” describes the IEA.
Preliminary signs suggest EV sales are increasing in countries with supply concerns, or where fuel price increases have been particularly steep.
“However, the full implications of the current crisis will take time to register in the car market, due in part to the lag between vehicle orders and deliveries,” the report noted.
This means that for consumers in emerging economies with low rates of motorisation and high sensitivity to fuel prices, electric two- and three-wheelers look to be an attractive option – sales more than doubled year-on-year in the first quarter of 2026 in Southeast Asia, and grew more than 30% in India.
GEOPOLITICAL HEADACHES
The agency highlights that the ongoing energy crisis resulting from the Middle East conflict has brought reliance on oil imports into sharp focus in many countries.
“The road transport sector represents close to half of oil demand today, and policy responses to the long tail of the current crisis stand to shape the global car market for years to come,” states the agency.
It adds that the oil crisis of the 1970s prompted the introduction of fuel efficiency standards, which resulted in a doubling of the fuel economy of conventional cars between 1975 and today. During the Covid-19 pandemic, many countries introduced EV subsidies to boost uptake and support a broader economic recovery.
“In 2025, the global fleet of EVs avoided the consumption of around 1.7 million barrels of oil per day, primarily in countries that have implemented fuel economy and CO2 standards, such as China and the European Union,” indicates the report.
Moreover, some countries in Southeast Asia have already announced plans to expand or extend EV tax incentives as part of their response to the current energy crisis.
“Europe saw the strongest growth among major EV markets, with electric car sales rising by more than 30% to reach 28% of total sales, following an increase in the stringency of the European Union’s CO2 standards for cars,” shared the report.
China’s growth in electric car sales slowed slightly, in part due to a temporary halt to its trade-in scheme, but EVs still accounted for nearly 55% of all car sales.
In the United States, electric car sales remained relatively stable at just under 10% of car sales, though the end of EV tax credits coincided with a drop in sales at the end of the 2025.
Some emerging markets saw steep increases in electric car sales.
In Southeast Asia, annual sales more than doubled to reach a sales share of nearly 20%, led by Vietnam, Indonesia and Thailand.
In Latin America, sales grew by 75%, led by Brazil and Mexico. More than 100 countries recorded electric car sales growth in 2025, and in one-third of these, they represented at least 10% of new car sales.
Chinese automakers supplied 60% of global electric car sales in 2025, while European and North American automakers were each responsible for about 15% of global sales.
