The Biggest Headlines from the IEA's 2026 Global EV Outlook

The adoption of EVs is set to accelerate further in 2026, reinforcing its growing role within the global energy system, according to the latest projections from the International Energy Agency (IEA).

The agency forecasts that global electric car sales will reach 23 million next year, representing close to 30% of total vehicle sales worldwide.

These projections are outlined in the newest edition of the IEA’s annual Global EV Outlook.

How EVs are reshaping energy demand

The Global EV Outlook highlights how EV expansion is increasingly intertwined with broader energy trends, spanning electricity demand, infrastructure development and fossil fuel displacement.

In 2025, global electric car sales rose by 20%, surpassing 20 million units and accounting for around a quarter of all new car sales globally.

Chinese manufacturers dominated the market, delivering 60% of EV sales, while European and North American automakers each held around 15%.

Fatih Birol, Executive Director of the IEA, says: “Electric car sales set new records in close to 100 countries last year.

“The growing popularity of EVs has marked a major shift for car markets and the energy system as a whole – and it is providing some relief now amid the largest oil supply shock in history.

“Looking ahead, the falls we have seen in battery prices and the potential policy responses to the current global energy crisis are set to provide further momentum in EV markets.”

How Europe has cultivated a bustling EV market

Europe emerged as the fastest-growing major EV market in 2025, with sales increasing by more than 30%, driven in part by tighter EU CO₂ emissions standards for passenger vehicles.

From an energy perspective, persistently high oil prices, linked partly to ongoing instability in the Middle East, are accelerating consumer interest in alternatives to internal combustion engines.

EVs typically offer lower operating costs compared with ICE vehicles, particularly as electricity prices stabilise relative to volatile oil markets.

Momentum has carried into 2026.

In the first quarter alone, multiple regions reported record-breaking sales. Europe posted 30% year-on-year growth, Asia Pacific excluding China surged by 80% and Latin America expanded by 75%.

In March 2026, 30 countries recorded their highest-ever monthly EV sales, while a further 60 markets reported annual growth.

How supply chains are shaping the energy transition

The IEA identifies policy frameworks and energy price dynamics as central to continued EV uptake, particularly in emerging markets. In Southeast Asia, EV market share is expected to expand significantly, potentially tripling by 2035.

International trade is also playing a pivotal role in scaling deployment, with around a quarter of EVs produced in 2025 exported across borders.

This reflects the growing interdependence of global energy and manufacturing systems.

Almost 22 million electric cars were produced in 2025, marking a year-on-year increase of more than 25%.

Chinese exports doubled to more than 2.5 million vehicles, cementing the country’s position as the leading EV production hub.

China also accounted for more than 80% of global battery cell production, with supply chains heavily concentrated across China, Korea and Japan, particularly for exports to Europe.

At the same time, battery manufacturing capacity expanded in both the EU and the US, signalling efforts to localise critical energy technologies.

Advancements in lithium-ion batteries, alongside new cell designs and pack architectures, are enabling faster and higher-voltage charging.

However, the IEA cautions that these developments could intensify pressure on electricity grids in certain regions as EV adoption scales.