How the electric car market shaped global automotive growth in 2024
The new What Next for the Global Car Industry report by the International Energy Agency examines the overall performance of the global automotive sector, highlighting a clear trend. Growth in 2024 was sustained almost entirely by the electric car market.
Global sales reached about 80 million vehicles, but the result was driven by electric and hybrid models, which accounted for 45 percent of registrations. Sales of internal combustion models remain 30 percent below their 2017 peak, with stable or declining values in many regions. According to the IEA, without the contribution of electric vehicles, the global automotive market would have posted only minimal growth. Market dynamics vary by region, public policy, and industrial cost structures, outlining a sector whose geography and structure are being reshaped.
Where the electric car market is advancing according to the IEA
The IEA notes that more than one in five cars sold worldwide is electric, but growth is not uniform. In China, penetration is firmly established. One in ten cars on the road is battery powered, and the share of electric and plug in models continues to rise.
In Europe, demand is supported by strict emissions rules and a broader range of vehicle offerings. In the United States, progress is more gradual but remains influenced by tax incentives and supply chain investment.
In emerging economies, adoption proceeds at different speeds. In many parts of Asia and Africa, electric vehicles remain limited. Higher prices relative to average incomes and insufficient charging infrastructure are among the main barriers. The IEA notes that these differences create diverging growth paths, with mature markets advancing rapidly and emerging markets still tied to internal combustion models.
China reaches 40 percent of global production
The geographical reorganization of production is a key focus of the report. In 2024, China overtook the European Union to become the world’s leading exporter of passenger cars. It reached 27 million units produced, equal to 40 percent of global capacity.
Between 2010 and 2024, Chinese production more than doubled, supported by vertical integration and domestic supply chains for components and batteries. Europe and North America each represent about 15 percent of global capacity, with slower growth tied to less dynamic domestic demand.
India also posted significant expansion, with production up 30 percent compared to 2019, strengthening its role in mid cost segments. According to the IEA, this redistribution is also reshaping employment. More than 10 million workers are now employed across the global automotive supply chain.
Batteries more than 30 percent cheaper in China
The IEA report highlights how competitiveness in the electric car market is heavily influenced by battery costs. In 2024, batteries produced in China had average prices more than 30 percent lower than in Europe and more than 20 percent lower than in the United States.
This advantage stems from economies of scale, vertical integration, industrial experience, and access to critical minerals. The IEA notes that producing an electric SUV in China costs more than 30 percent less than in advanced economies.
The analysis also shows that electricity prices can affect EV manufacturing more than internal combustion production. In markets with high electricity costs, energy consumption can weigh up to twice as much as it does for ICE models.
According to the report, about 50 percent of the cost gap is linked to efficiency and automation, 30 percent to materials, and the remainder to commercial choices, brand strategies, and margins applied to different models.
Europe and the United States, CO₂ rules and industrial incentives to support the electric car market
Europe is building much of its EV growth around stricter environmental regulation and attempts to establish an autonomous battery supply chain. Emissions rules have supported demand, while production remains exposed to international competition because of reliance on imported components and materials.
In the United States, the IEA highlights a strategy more focused on reshoring. Tax credits under the Inflation Reduction Act, still active in 2024, help narrow part of the cost gap with China in battery and component manufacturing. The report notes two main limits. Domestic availability of critical minerals remains insufficient, and the gradual phaseout of purchase credits may slow internal demand.
Asia strengthens its position through lower battery costs and integrated supply chains
China remains the most dynamic and competitive market. More than 50 manufacturers operate in a highly competitive environment that has compressed margins, accelerated innovation, and expanded adoption of LFP batteries. Battery costs in the country are more than 30 percent lower than in Europe and more than 20 percent lower than in the United States. The government has also introduced export controls on batteries and components, directly affecting international supply chains.
Japan is developing a strategy centered on the broad category of electrified vehicles, supporting research and development on hybrids, plug ins, BEVs, and fuel cells. The 2020 Green Growth Strategy identified EVs and batteries as a priority area for innovation.
South Korea introduced targets for EVs and infrastructure in 2017. In 2021, the Framework Act on Carbon Neutrality and Green Growth set the gradual phaseout of internal combustion vehicle sales and use.
Emerging markets held back by insufficient infrastructure and high prices in the electric car market
The IEA report shows that in emerging markets the growth of the electric car market is slower and more fragmented. In many Asian, African, and Latin American economies, EV penetration remains low for three main reasons. Purchase costs are still high relative to average incomes, charging infrastructure is insufficient, and the availability of affordable models is limited.