Quarterly Review of the Cleantech Market: Highlights from Q2 2025
In the ever-evolving world of electric vehicles (EVs), 2025 has seen some significant changes in the global market. The electric vehicle (EV) market in 2025 remains strongest in China, which accounts for about 65% of all global EV sales, outpacing Europe and the United States.
China continues to lead with rapid EV adoption and gains in advanced technologies like solid-state batteries and range-extended electric vehicles (e-REVs). In Europe, the EV market share saw some stagnation in 2024 at 20% due to expiring incentives in Germany and France and policy delays. However, stricter CO₂ emission standards in 2025 are expected to raise this share to 25%, with a projection close to 60% by 2030. The UK had a stronger year, reaching nearly a 30% EV sales share, supported by the Vehicle Emissions Trading Scheme mandating minimum electric vehicle registrations. Norway remains a leading market with about 88% of new cars being battery electric vehicles (BEVs) and minimal plug-in hybrids.
In the United States, the EV market growth outlook has been dampened by recent policy rollbacks, tariff introductions, and uncertainty surrounding government incentives. This environment has weakened momentum compared to China and Europe, with a downgraded growth trajectory for EV adoption.
Volkswagen's experience reflects these trends: globally its BEV deliveries increased about 47% in the first half of 2025, with particularly strong growth in Western Europe where 1 in 5 vehicles delivered was fully electric, despite the challenging market conditions in some regions including the US.
Policy shifts have been a crucial driver. Europe's stricter emission targets will likely boost EV sales, while US policy uncertainty and tariffs have slowed adoption momentum. China's continued government support and technological leadership sustain its dominant position. Additionally, emerging markets are experiencing faster EV growth than expected, influenced in part by Chinese exports and investments, expanding the global EV footprint beyond traditional Western markets.
In summary:
| Region | EV Market Share / Sales Share (2025) | Key Factors | |------------------|-----------------------------------------------|-----------------------------------------------------| | China | ~65% of global EV sales | Strong policy support, tech innovation (solid-state batteries, e-REVs) | | Europe | 20% market share in 2024; projected 25% in 2025 | Expiring incentives slowed 2024; stricter CO₂ standards driving 2025+ growth; UK strong due to emission trading scheme | | United States | Growth outlook downgraded | Policy rollbacks, tariffs, incentive uncertainty slowing adoption | | Emerging Markets | Rapid growth exceeding some developed markets | Driven by Chinese investments and policy experimentation |
This illustrates how US policy shifts have moderated its EV market growth, while China and Europe remain the leading and accelerating forces in the global EV transition.
A recent development in the US is the passing of the One Big Beautiful Bill Act, which has affected tax credits for wind and solar projects, clean vehicle and alternative fuel tax credits, and residential clean energy credits. However, the bill preserved the full Section 48E investment and Section 45Y production tax credits for non-wind and solar technologies, providing long-term certainty for the geothermal industry. The impacts of this legislation on the US EV market are yet to be fully realised.
Tech investing in the geothermal industry is likely to see growth due to the preservation of Section 48E investment and Section 45Y production tax credits in the One Big Beautiful Bill Act. Energy investing in clean vehicle and alternative fuel technologies could be affected by the bill, but the precise impact on the US EV market remains uncertain. The technology sector, including advancements in solid-state batteries and range-extended electric vehicles (e-REVs), continues to play a significant role in the expansion of the global EV market, with China leading the way.
