EV market growth continues across land, sea, and air, with sales surging in recent years. IDTechEx’s latest report, “Electric Vehicles: Land, Sea, and Air 2025-2045,” reveals that EV sales reached 40 million in 2024 and will likely hit 143 million by 2045. The report examines 11 EV sectors and explores how regulations and cost savings drive electrification. However, political and economic shifts could alter this trajectory, according to IDTechEx data.

Regulatory Policies Drive EV Market Growth

IDTechEx forecasts that electric cars will dominate the EV market growth for the next two decades. With over a billion cars on the road, regulators continue to push electrification efforts to cut emissions. However, changing political landscapes may impact these policies.

Shifting EV Regulations in the U.S. and Europe

A new U.S. administration in 2025 could alter federal EV policies, potentially:

• Reducing EV incentives;
• Restricting states from setting their own emissions standards;
• Revising EPA emissions targets through 2032.

In Europe, automakers have pressured regulators to ease CO₂ fleet average requirements. In early 2025, the European Commission approved a phased approach, allowing automakers to gradually adopt new regulations and avoid heavy fines. While this benefits less-electrified manufacturers, highly electrified brands may lose revenue from emissions credit sales.

The 2035 ban on internal combustion engine (ICE) sales remains intact, though industry leaders are pushing for hybrids and alternative fuels to remain part of the mix.

How Policy Changes Affect EV Sales

Global electric car sales surpassed 18 million in 2024, fueled by government incentives and compliance policies. A weaker regulatory push could slow adoption, but lower battery costs and increased EV investments should sustain EV market growth, according to IDTechEx data.

China exemplifies a successful market-driven EV model, selling 12.8 million EVs in 2024. Despite potential regulatory adjustments, IDTechEx projects that annual EV sales will reach 70 million by 2045.

Cost Savings Drive EV Adoption Beyond Passenger Cars

While regulations shape the passenger car sector, industries like construction and mining prioritize total cost of ownership (TCO) over compliance. TCO includes both purchase and operational expenses, making financial benefits a key driver in electrification.

For instance, a diesel-powered mining haul truck could accumulate $8.6 million in fuel costs over its lifetime, while an electric haul truck could cut that expense to $3.1 million. These savings encourage businesses to switch to EVs, regardless of government mandates.

The Future of EV Market Growth

As governments adjust EV policies, some sectors—especially passenger vehicles—may experience a slower transition. However, cost reductions and operational savings will continue to push electrification forward, according to IDTechEx.

Despite regulatory uncertainty, the EV market growth remains strong, driven by advancements in battery technology, cost efficiency, and expanding investment in electric mobility.