The Future of Electric Vehicles in 2025

Tech Frontier |

The global new energy vehicle market is undergoing structural change in 2025. The competitive landscape between pure electric vehicles (BEVs) and extended-range electric vehicles (EREVs) is characterized by accelerated breakthroughs in pure electric vehicles, while extended-range vehicles face pressure and adjustments. This shift is driven by a combination of technological advancements, policy guidance, infrastructure improvements, and evolving user needs.


Definition and Classification of New Energy Vehicles
New energy vehicles (NEVs) utilize unconventional automotive fuels (or conventional fuels but employ novel onboard powertrains) and integrate advanced technologies in vehicle power control and propulsion to create advanced technical principles, new technologies, and new structures. Based on powertrain type, NEVs primarily include pure electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), extended-range electric vehicles (EREVs/REEVs), and fuel cell electric vehicles (FCEVs). Key characteristics are as follows:
  1. Pure Electric Vehicles (BEVs):
BEVs rely solely on stored energy from their batteries for propulsion. These vehicles offer zero tailpipe emissions, quiet operation, and high energy conversion efficiency, making them ideal for urban commuting and short-distance travel. With advances in battery technology, the range of pure electric vehicles (BEVs) is continuously improving, gradually meeting the needs of a wider range of users.
  1. Plug-in Hybrid Electric Vehicles (PHEVs):
PHEVs combine a traditional internal combustion engine and an electric motor, with the battery recharged from an external power source. These vehicles prioritize electric propulsion for short distances, switching to the internal combustion engine for longer journeys or when the battery is low, thus achieving more flexible energy use and longer driving range. As a transitional technology, PHEVs provide a viable path for the transition from traditional fuel vehicles to pure electric vehicles.
  1. Extended-Range Electric Vehicles (EREVs/REEVs):
EREVs rely primarily on the electric motor for propulsion, but are equipped with an auxiliary power supply, or range extender, typically consisting of an engine and generator, to recharge the battery when the battery is low, thereby extending the vehicle's range. This design aims to reduce "range anxiety," offering a range close to that of a traditional fuel vehicle while retaining the efficiency and environmental benefits of electric motors, providing consumers with a balanced solution.
  1. Fuel Cell Electric Vehicles (FCEVs):
Fuel cell vehicles use a chemical reaction between hydrogen and oxygen in a fuel cell to generate electricity, which drives an electric motor. These vehicles emit only water, making them considered one of the most environmentally friendly new energy vehicles. Although current applications of fuel cell vehicles face challenges such as hydrogen storage, transportation, and the construction of hydrogen refueling stations, with technological breakthroughs and improved infrastructure, fuel cell vehicles are expected to become a major force in driving a green transportation revolution in the future.

Global New Energy Vehicle Industry Development
① Countries around the world encourage and support the development of the new energy vehicle industry
With the continued advancement of global industrialization, energy and environmental issues have received widespread attention from governments worldwide, and energy conservation, emission reduction, and green development have become a global consensus. As a key means of reducing carbon emissions and improving air quality, new energy vehicles have received widespread attention and support from various countries, and a series of policies supporting their development have been introduced.
For example, the United States provides vehicle purchase subsidies, allocates funds for charging infrastructure construction, and sets sales targets for emission-free vehicles. The European Union invests in technology research and development, plans the layout of charging infrastructure, and establishes a timetable for banning the sale of fuel-powered vehicles. Japan promotes electrification through energy subsidies, vehicle purchase subsidies, improving charging infrastructure, and setting sales targets for new energy vehicles. Saudi Arabia not only provides vehicle purchase subsidies but also establishes a charging station construction plan and market development targets for new energy vehicles. These policies cover multiple dimensions, including technology research and development, infrastructure development, energy subsidies, and target setting, comprehensively supporting the development of new energy vehicles.
② Global New Energy Vehicle Market Size and Forecast
In recent years, the global new energy vehicle market has experienced rapid growth, with global new energy vehicle sales projected to increase from 3.0229 million units in 2020 to 18.7762 million units in 2024, representing a compound annual growth rate of 57.87%. With the further development of new energy vehicle technology, the increasing globalization of the industry chain, continued policy support, and consumers' increasing considerations of cost and environmental awareness, global new energy vehicle sales are projected to reach 51.0270 million units by 2029, with a compound annual growth rate of 22.13% from 2024 to 2029.
From a market segment perspective, new energy passenger vehicles are the primary driver of continued global new energy vehicle growth. Their sales are projected to increase from 2.8515 million units in 2020 to 17.9377 million units in 2024, a compound annual growth rate of 58.37%. They will account for 95.53% of the global new energy vehicle market in 2024. Their sales are projected to reach 47.2112 million units in 2029, a compound annual growth rate of 21.35% from 2020 to 2029. Meanwhile, new energy commercial vehicle sales are also steadily expanding, increasing from 171,400 units in 2020 to 838,500 units in 2024, a compound annual growth rate of 48.72%. They are projected to grow at a compound annual growth rate of 35.40% to 3.8158 million units in 2029.
③ Global New Energy Passenger Vehicle Sales Analysis
Based on powertrain type, new energy passenger vehicles can be categorized as pure electric passenger vehicles, plug-in hybrid passenger vehicles, extended-range electric passenger vehicles, and fuel cell passenger vehicles.
Pure electric passenger vehicles have become the largest segment of new energy vehicles. In 2024, global pure electric passenger vehicle sales will reach 11.3353 million units, accounting for approximately 63.19% of global new energy passenger vehicle sales. Sales are projected to grow to 25.8245 million units in 2029.
Plug-in hybrid passenger vehicles offer the advantages of lower fuel costs and reduced reliance on charging stations. They also offer flexible driving modes and long driving range, making them popular with consumers. In 2024, global plug-in hybrid passenger vehicle sales will reach 5.3725 million units, accounting for approximately 29.95% of global new energy passenger vehicle sales. From 2024 to 2029, sales of plug-in hybrid passenger vehicles are projected to grow at a compound annual growth rate of 21.39% to 14.1634 million units.
Range-extended electric passenger vehicles (EREVs) are a special type of EREV. In 2024, global sales of EREVs reached 1.2249 million units, accounting for approximately 6.83% of global new energy passenger vehicle sales. From 2024 to 2029, sales of EREVs are projected to grow at a compound annual growth rate of 42.04% to 7.0817 million units, representing approximately 15% of global new energy passenger vehicle sales.
Fuel cell passenger vehicles are still in the early stages of market development, but with further technological advancements and the development of supporting infrastructure, their global market penetration is expected to increase further. In 2024, global sales of fuel cell passenger vehicles will be approximately 4,900 units. It is estimated that by 2029, sales of fuel cell passenger vehicles will grow rapidly to 141,600 units, with an average annual compound growth rate of 95.65% during the period.

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