The state of the electric vehicle industry in 2025 and beyond

The year 2024 was, in many ways, the year of the hybrid vehicle, with several major automotive manufacturers including Ford, Hyundai, and General Motors announcing their intentions to focus more on the technology – not abandoning electric vehicles (EVs) but expanding to include more hybrid options. Hybrids can be seen as a stepping stone to full electrification, offering a more eco-friendly option than internal combustion engine (ICE) vehicles without the range anxiety that still has many potential buyers hesitant to invest in EVs.

Consumer anxiety is decreasing, however. While some headlines have proclaimed EVs to be doomed, the numbers show the opposite. In 2024, 1.3 million EVs were sold in the United States, setting a new record with sales rising 7.3% from 2023 according to Kelley Blue Book. That number is expected to rise even further in 2025 – Cox Automotive projects as many as one in four vehicles sold in the U.S. will be electrified, with fully electric vehicles accounting for 10% of market share and hybrids taking 15%, while ICE vehicles are expected to hit a record low of 75%. Globally, MarketsandMarkets predicts in the light vehicle segment, the hybrid vehicle market share will grow at a year-over-year rate of 20% to 25% over 2024 to 2025. 

The EV industry has grown and diversified – while Tesla still takes the top two slots on the list of most popular EV models in the U.S., it’s not the titan it used to be, selling more than 37,000 fewer cars in 2024 than 2023, while GM added roughly the same amount in the same time period. Below are the top 10 EV models sold in the United States in 2024:

1. Tesla Model Y
2. Tesla Model 3
3. Ford Mustang Mach-E
4. Hyundai Ioniq5
5. Tesla Cybertruck
6. Ford F-150 Lightning
7. Honda Prologue
8. Chevrolet Equinox
9. Cadillac Lyriq
10. Rivian R1S

It’s worth noting it’s not just individual drivers propelling EV market growth – electric commercial fleets are also growing rapidly as advanced battery technology reduces operating costs and boosts vehicle efficiency. The U.S. electric commercial vehicle market was valued at $13.88 billion in 2023 and is expected to reach $55.92 billion by 2029 at a CAGR of 26.41%.

EVs were successful on a global scale as well – in fact, 2024 was a record-breaking year for EV sales, according to Rho Motion. A total of 17.1 million EVs were sold across the world last year, a 25% increase over 2023 with the most dramatic growth coming in China at 40%. The vehicle electrification market was valued at $91.6 billion in 2024 and is predicted to grow at a compound annual growth rate (CAGR) of 8.4% to reach $205 billion by 2034.

A look ahead
All in all, 2024 was a good year for the EV industry – so what can we expect for 2025? Despite optimistic predictions by research firms such as Cox, that’s still a bit of a loaded question with a lot of uncertainty around it. On U.S. President Trump’s first day in office, he revoked an executive order signed in 2021 by former President Biden aimed at making 50% of U.S. vehicle sales electric by 2030 and announced his intention to terminate emissions regulations, tax credits, and other EV- and climate-related initiatives. How many of these efforts will come to fruition and to what extent remains to be seen in what is currently a highly volatile country.

However, some experts believe efforts to slow the growth of the EV industry may be less effective than feared, due to consumer interest rising regardless of governmental support, or lack thereof.

A recently released study from Tata Consultancy Services (TCS) showed 64% of more than 1,300 people surveyed across the globe indicated they’re likely or very likely to consider an EV as their next automotive purchase. Respondents also acknowledged their concerns about EV adoption – 60% named charging infrastructure as a major challenge. However, 56% said they’d be willing to pay up to $40,000 for an EV. While the average cost of an EV is higher than this at $55,544 as reported by Kelley Blue Book, the price gap between EVs and ICE vehicles is closing, with the average gas-powered automobile costing $49,740 as of December 2024.

The developing and diversifying battery industry
This gap is likely to continue to close as battery prices drop. Goldman Sachs Research projects average battery prices could fall to about $80/kWh by 2026, an almost 50% drop from 2023. This would put EVs on the same level, cost-wise, as ICE vehicles, even without subsidies.

The reasons behind falling battery prices include battery metals such as lithium and cobalt continuing to drop, as well as ongoing efforts to develop more energy-dense, lightweight battery designs promoting efficiency.

The battery industry itself is one to watch as technology developments and overall predictions rapidly change. 2024 saw numerous developments in solid state battery technology, a much-pursued goal for its promises of greater safety, energy density, range, and other improvements over lithium-ion batteries. While the challenges of scaling up solid state battery technology have been substantial, delaying their arrival longer than expected, many manufacturers are promising their release in the next few years.

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Industry analysts, however, are more cautious, pointing to improvements in lithium-ion batteries allowing them to remain highly competitive even when solid-state batteries do arrive. Many experts believe solid-state batteries will establish themselves in the industry more gradually than the hype has predicted, with semi-solid-state batteries, a hybrid between liquid- and solid-electrolyte technology, serving in the same stepping stone role as hybrid vehicles.

Charging infrastructure
The other major factor influencing EV adoption is the development of a reliable, accessible charging network. As mentioned previously, more than half of consumers considering EV purchases still have concerns about charging infrastructure, but manufacturers and governmental entities are well aware of these concerns and are pushing hard to establish more charging stations and ensure they’re affordable and reliable.

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The global EV charging market size was valued at $16.43 billion in 2023 and is projected to grow from $22.45 billion in 2024 to $257.03 billion by 2032 at a CAGR of 35.6%. In the United States, the market is projected to grow to $2.04 billion by 2032. The amount of publicly available EV chargers in the U.S. has doubled since the end of 2020 according to the Joint Office of Energy and Transportation. Again, there’s some instability to future predictions in the U.S. due to the new administration, as one of Trump’s executive orders instructed federal agencies to pause the distribution of funds for new EV chargers. However, most of the funding from the Biden administration’s 2021 Bipartisan Infrastructure Law and National Electric Vehicle Infrastructure (NEVI) Formula Program has already been distributed. In addition, private companies can still provide funding for charger development.

Reasons for optimism
Sales of EVs in the United States climbed 15.2% year over year in the fourth quarter of 2024 to 365,824 – a new volume record for any quarter, though this may indicate interested buyers scrambling to purchase EVs before the potential revocation of e-mobility tax incentives by the new presidential administration. In addition, publicly available DC fast chargers grew 7.6% in Q4 2024, from 46,100 to 49,604, another record.

While there’s some uncertainty to exactly what the future holds for the EV industry, most analysts remain optimistic that growth will continue regardless of governmental action or inaction. Keep an eye on this site for the latest news throughout 2025, and join us on February 12 at noon ET for What’s ahead in manufacturing in 2025, a roundtable discussion and Q&A session about the EV industry as well as aerospace, defense, and medical manufacturing in the year ahead.