In the face of the rapidly changing global automobile market, Electric Vehicles are emerging as a transformative force in molding the future of transportation, representing a paradigm shift from once a niche choice to a mainstream one in global transportation. With cost reduction driven by market competition, improved battery technology paired with clean energy, EV adoption has been steadily gaining momentum around the world.
With sales surging across the tipping point in places like China, Europe and the USA, analysts say that EVs' domination might come sooner than expected. According to the IEA, the first quarter of 2025 saw a strong start-over 4 million EVs were sold globally, a 35% jump from the same quarter in 2024. By the end of 2025, the IEA projects EV sales to increase by 25% i.e. 20 million cars to be sold worldwide, which would account for one quarter of total car sales.
Tax credit fades, so does momentum
In the US itself, more than 360,000 EVs were sold in the first quarter of 2025, around 10% more than during the same period the previous year. September marked the second consecutive month of high EV record sales, a boom that analysts remark was largely fueled by consumers who sought to take advantage of the federal tax credits that expired on the 30th of September, which offered up to $7500 on select BEVs, PHEVs and fuel cell vehicles.
With President Trump scrapping the tax credit, claiming climate change as a “con job”, demand is expected to fall sharply in Q4 of 2025. Despite the record-breaking quarter, US carmakers are bracing to see a reversal in the current market dynamics, in light of reduced consumer incentives and federal policy.
What are the experts saying
“It's going to be a vibrant industry, but it's going to be smaller, way smaller than we thought,” Ford chief executive Jim Farley stated at an event. Speaking at a conference last month, the chief financial officer of General Motors, Paul Jacobson also commented, “I expect the EV demand is going to drop off pretty precipitously,” acknowledging it would take time to gauge how quickly buyers would return.
What to expect next
While it's still early to say that the US is behind, if the emerging EV markets keep tripping over higher costs, fragmented policies and irregular infrastructure development, the US might just find itself pedaling uphill while its global counterparts zoom ahead, affecting not just profitability but sustainability in the long run as well.