Worldwide sales of electric vehicles and plug-in hybrids will increase by at least 17 percent in 2025, topping 20 million units. This is according to research firm Rho Motion.

　　China

　　One of the drivers of that continued growth is the extension of Chinas subsidy program, which is available when consumers trade in their old car for a new plug-in hybrid vehicle (PHEV) or all-electric vehicle.

　　Europe

　　The worlds second-largest market for electric vehicles id Europe, and it will return to sales growth as CO2 emission targets come into force and cheaper models become available to the public. However, warns Lola Hughes, head of research at Rho Motion, the pace of growth will be slower than in 2023.

　　A critical year

　　Manufacturers see 2025 as a transformative year as Europe introduces new targets to encourage the adoption of electric models and China extends its subsidy program, this as the U.S. backtracks on electrification targets under its new administration.

　　Rho Motion believes that EV sales in China could grow faster than the 17-percent growth forecast for 2025, and that it will reinforce its dominant position in the market. In 2024, sales jumped by a record 40 percent to 11 million units.

　　Sales of electric vehicles manufactured in China will confirm 2024 trends in Latin America, where they accounted for 80 percent of market share. Sales and market shares will continue to grow in the Asia-Pacific region and in emerging markets, according to the firm.

　　In Europe, the growth in sales of electric vehicles will help avoid EU fines for emissions. The group forecasts an overall sales increase of 15 percent in comparison with the 3 million all-electric and plug-in hybrid vehicles sold last year.

　　Manufacturers still face fines of around 10 billion for failing to meet EU emissions targets, even if they buy credits from electric vehicle manufacturers.

　　The United States

　　Finally, despite the political situation in the U.S., Rho Motion forecasts EV sales growth of 16 percent in 2025. However, it expects there will long-term consequences of the new policies, including a 47 percent drop in EV demand by 2040, in the worst-case scenario.

　　The situation in the U.S. is admittedly more difficult to predict than elsewhere. Its unclear how the market will react to the new policies, and individual states have strong powers over their own electrification policies as well.