In its latest Electric Vehicle Outlook, BNEF attributes the continued rise in sales to falling lithium-ion battery prices, the introduction of more affordable EV models and the surge in EV adoption in emerging markets. In addition, the war in Iran and resulting increase in prices at the pump have boosted consumer interest in buying an EV, though it is too early to draw a clear link with higher EV sales over the near-term, BNEF notes.

China continues to account for the largest share of the global EV market, with electric vehicles now making up nearly two-thirds (64%) of domestic car sales.

Focus is also turning to emerging EV markets where the demand for EVs is surging and where adoption now often exceeds that of the US, according to the report. Nearly half of all cars sold in Singapore in 2025 were electric, followed by Vietnam at 39% and Thailand at 27%. In Turkey, passenger EV sales more than doubled in just one year, with electric cars accounting for 22% of total sales. A drive towards oil import independence, relative openness to Chinese automakers and EV-focused industrial policies are thought to be behind this growth.

In Singapore and Thailand, EV models from Chinese brands have driven adoption, with Chinese brands making up 88% of all EVs sold in Thailand in 2025. The analysis finds that similar – or higher – EV penetration rates without Chinese automakers are possible. Vietnam, for instance, saw EV sales almost double to 179,000 in 2025, with domestic automaker VinFast accounting for 98% of the total. Similarly, in Turkey, domestic manufacturer Togg was the market’s second-largest EV brand in 2025, after BYD.

The growing proliferation of EVs in road transport has a deep impact on the trajectory for global oil consumption, with total road fuel demand expected to peak in 2029. Under BNEF’s economic transition scenario, the combined impact of fleet electrification and fuel efficiency improvements avoids 25.8mn b/d of road fuel demand by 2040, four times larger than the oil displacement across aviation, marine and petrochemicals sectors combined.

Despite strong global momentum, BNEF has revised down its EV adoption outlook for the second consecutive year, citing slower growth in China and the US.

In China, tighter eligibility requirements for incentives and increasing market maturity are weighing on growth. In the US, EV sales are projected to fall 19% this year following the rollback of federal support, including fuel economy targets and elements of the Inflation Reduction Act. As a result, EVs are expected to make up just 24% of the US vehicle fleet by 2040.

Affordability remains a key barrier globally. In major European markets such as Germany, Italy and the UK, battery electric vehicles are still around 17% more expensive than comparable internal combustion engine (ICE) cars, although this gap has narrowed significantly from 34% in 2024.

Battery costs remain the largest component of EV pricing. While efforts to localise battery supply chains are accelerating, matching China’s cost base remains challenging. The country continues to benefit from a mature supply chain, lower input costs, favourable financing conditions and intense competition, resulting in the lowest battery prices globally. By contrast, smaller manufacturing scale and less integrated supply chains in North America and Europe are likely to keep costs higher.

BNEF also highlights the slower pace of fleet turnover. Despite rapid sales growth, electric passenger vehicles are not expected to outnumber ICE vehicles on the road until 2047. By 2040, more than one billion combustion-engine passenger cars will still be in use globally, alongside the majority of trucks, vans, two-wheelers and buses.