2025 Global Auto Sales Set For 1.7% Rise, BEVs Surge By 30%

According to a recent report by S&P Worldwide Mobility (S&P), new vehicle sales are forecasted to increase by 1.7% year-over-year (Y-o-Y) in 2025, reaching 89.6 million units.

S&P, however, elected to lower its projections in light of the challenges brought on by rising interest rates, shifting policies and economic uncertainty, especially in the United States.

The analysts reckons that issues with affordability, high vehicle costs and inconsistent customer confidence are some of the challenges auto sector is set to face. S&P also placed electrification as a top priority, despite complications brought forward by sluggish adoption in important areas and waning government backing.

For the European market region, S&P had initially projected just under 15.0 million units for 2024, with cautious consumers and OEMs adjusting propulsion strategies. For 2025, S&P expects flat growth at 15.0 million units instead amid economic risks, high prices, reduced EV subsidies, EV tariffs, and political uncertainty in Germany and France.

Key challenges in Europe also include electrification trends, EU tariffs on Chinese imports, Trump tariff risks and debates over EU emission targets.

Sales in the United States market, on the other hand, are expected to reach 16.2 million units in 2025, marking a 1.2% rise from 2024, amid continued affordability challenges, high prices, and cautious consumer demands.

While interest rates may ease, inventory management pressures are expected to keep growth prospects modest in view of the new administration's policies.

In China, EV incentives, new trade-in programs and government stimulus had propelled the country's vehicle demand to reach 25.8 million units in 2024. For 2025, S&P reckons demand will increase by 3.0% to 26.6 million units.

The firm reckons intense price wars, decreased battery prices, and ongoing NEV tax breaks will be key drivers for which. It also reckons the number of NEVs would increase from 49% in 2024 to 58%.

Following a difficult 2024 hampered by Daihatsu's shipment suspension due to pollution concerns, S&P expect Japan to experience a 25% rise in light vehicle demand in 2025, hitting 4.6 million units.

Although there are dangers associated with worse global economic issues and possible US tariffs, slower US BEV adoption may offer some relief for Japanese automakers.

Despite this, BEV sales are forecasted to grow by 30% in 2025, reaching 15.1 million units and accounting for 16.7% of global light vehicle sales. China and Europe are poised to lead the charge.

However, looking beyond 2025, there are several unknowns surrounding the rate of electrification. These factors are development of charging infrastructure, grid capacity, battery supply chains, tariff obstacles, technology developments and more importantly legislative backing that is crucial to move away from fossil fuels.

For now though, sustainable mobility is still being promoted by China's NEV program and Europe's "Fit for 55" campaign, while it is unclear how President-elect Trump will handle US EV assistance.