By the end of 2025, it is anticipated that 85 million electric vehicles (EVs)—including cars, buses, vans, and heavy trucks—will be operational on the roads, according to the latest projections from Gartner, Inc.
Market challenges and future projections
Jonathan Davenport, senior director analyst at Gartner, noted that although the EV market has faced various challenges in recent months, the global count of EVs is expected to reach 64 million units in 2024, with a 33 percent increase anticipated in 2025. He mentioned that many companies overestimated the pace of the transition to EVs, which led to delays in the rollout of new models. Davenport also emphasized that the surge in 2025 will be primarily fueled by increased EV sales in China (58 percent) and Europe (24 percent), together expected to account for 82 percent of all EVs in use worldwide.
Rise in battery electric vehicles
Globally, the number of battery electric vehicles (BEVs) in operation is projected to approach 62 million units by the end of 2025, marking a 35 percent rise from 2024. Meanwhile, plug-in hybrid electric vehicles (PHEVs) are forecasted to grow at a slightly more modest pace, reaching 23 million units by 2025, up 28 percent from the previous year.
Regional trends in EV ownership
Regionally, the volume of EV ownership in China is set to significantly surpass the combined totals of the rest of the world through 2025 and likely into the next decade. Demand for EVs is expected to steadily increase in Europe and North America, which together are projected to represent 36 percent of global EVs in 2024. By 2025, Gartner estimates that China will have 49 million EVs on the road, compared to 20.6 million in Europe and 10.4 million in North America.
Recycling initiatives by 2030
By 2030, automakers are expected to facilitate the recycling of 95 percent of batteries from EVs to address concerns regarding raw material shortages. Davenport pointed out that as EV sales continue to grow annually, resolving the issue of raw material scarcity will be challenging. He indicated that a comprehensive recycling initiative aimed at recovering materials from used batteries and production waste, combined with EU mandates for battery recycling, could lessen the demand for additional mineral extraction.
Value of spent batteries
Davenport explained that the concentrations of rare metals in batteries are greater than those found in natural ores, suggesting that spent batteries can be viewed as highly concentrated sources of these materials. He noted that if recovered on a large scale, these used batteries could enhance the overall economic viability of EVs by lowering battery costs, while also helping to prevent the improper disposal of batteries and reduce landfill contributions.
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Plans for new models
In April 2024, Tesla revealed plans to launch new models in the latter half of 2025, including more budget-friendly options that were previously thought to be scrapped.
Despite recent claims suggesting the cancellation of a lower-cost “Model 2” in favor of prioritizing a robotaxi, Tesla has reaffirmed its dedication to producing more affordable electric vehicles, potentially starting as soon as 2025. However, CEO Elon Musk did not elaborate on whether these lower-priced EVs would be entirely new designs or simplified iterations of existing models.
During Tesla’s first quarter earnings call, Musk responded to investor worries regarding the postponed introduction of a low-cost EV and acknowledged ongoing discussions about the company’s updated product roadmap. He indicated that Tesla has revised its future vehicle lineup to accelerate the launch of new models, with the possibility of these vehicles debuting as soon as early 2025 or even later this year.
Efficient production strategy
The upcoming vehicles will utilize aspects of a next-generation platform while also building on the existing framework used for Tesla’s well-received Model 3 and Model Y. Musk stressed that producing these new models would not necessitate a new factory or extensive new production lines, as they could be manufactured more efficiently within the current production framework. He also suggested that this strategy could potentially boost Tesla’s production capacity to over 3 million vehicles annually.
In the first quarter of 2024, Tesla reported revenue of $21 billion, reflecting a 9 percent decrease from the previous year. The company’s net income fell by 55 percent to $1.1 billion. This decline in sales during the quarter was attributed to a slowdown in demand for electric vehicles. Analysts contend that launching a more affordable model is essential for Tesla’s continued growth.
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