IEA: How EV Adoption is Changing Global Oil Demand
The global electric vehicle (EV) transition continues to upend traditional energy patterns.
Despite some narratives suggesting a slowdown, the global EV transition has continued to accelerate.
The International Energy Agency’s (IEA) Global EV Outlook 2025 confirms that EV adoption is not only maintaining momentum, but also setting new records across multiple markets.
Growth for EVs
China remains the largest player in the EV market and leads in reshaping energy demand across the transport sector.
With more than 11 million EVs sold in 2024, more than all global EV sales in 2022, China has cemented its role as the energy transition’s pace-setter.
As the IEA outlines, 1 in 10 cars on Chinese roads is now electric.
This is backed by robust production, export capacity and government support, including incentives and falling battery prices.
China’s efforts are not just impacting domestic uptake. Its production accounts for more than 70% of global EV manufacturing.
This scale is pushing down vehicle and battery costs worldwide and reshaping supply chains, with power demand shifting from petroleum to electricity.
“Our data shows that, despite significant uncertainties, electric cars remain on a strong growth trajectory globally,” explains Fatih Birol, IEA Executive Director.
“Sales continue to set new records, with major implications for the international auto industry.
“This year, we expect more than one in four cars sold worldwide to be electric, with growth accelerating in many emerging economies.
“By the end of this decade, it is set to be more than two in five cars as EVs become increasingly affordable.”
The IEA projects that by 2030, electric mobility could displace more than 5 million barrels of oil daily, with China accounting for half of that.
EV adoption around the world
Beyond China, emerging markets in Asia and Latin America are becoming the new focal points for EV energy impact.
In these regions, the shift from fossil fuel-powered vehicles to electric transport represents a change in how energy is consumed, stored and distributed.
In Southeast Asia, sales grew by nearly 50% in 2024, reaching 9% of total car sales.
Brazil saw sales more than double in 2024 and Southeast Asia overall has emerged as an upcoming market, with notable gains in Indonesia and Vietnam.
Sales in Africa also more than doubled, mostly thanks to growing sales in Egypt and Morocco.
However, EVs still represent less than 1% of total car sales across the continent.
Across all emerging economies outside of China, Chinese imports made up 75% of the increase in electric car sales in 2024.
In many of these regions, EVs now account for 5–13% of new car sales.
These markets are adopting EVs at scale and changing their energy profiles, sometimes without having built legacy oil-based transport infrastructures.
The energy grid in these regions must adapt to this growth, with rising demand for electricity, localised storage solutions and charging infrastructure becoming essential.
EVs in Europe and the US
The US is also witnessing resilient growth according to the report.
Despite political uncertainties and proposed changes to federal incentives, EV sales in the US are projected to grow by nearly 10% in 2025, maintaining a double-digit market share.
This significant growth meant EVs accounted for more than 1 in 10 cars sold.
State-level incentives and an increasing range of models are helping to sustain consumer interest, the IEA says.
Europe has seen a relative plateau in EV sales, largely due to the planned phase-out of purchase subsidies.
However, the IEA says that the region continues to lead on infrastructure and regulatory ambition.
EVs account for around 20–25% of all new cars sold and new CO₂ targets from 2025 are expected to reignite growth.
Countries such as the United Kingdom, Norway and Denmark continue to set benchmarks for electrification and policy support.
Emissions standards in the European Union and the United Kingdom will require higher shares of zero-emission car sales in 2025.
In Europe, CO₂ targets support the achievement of a sales share of close to 60% by 2030, slightly below projections from 2024.
“Based on today’s policy settings alone, almost one in three cars on the roads in China by 2030 is set to be electric and almost one in five in both the United States and European Union,” Fatih says.
“This shift will have major ramifications for both the auto industry and the energy sector.”
Battery electric vehicles (BEVs) still cost 20–30% more than petrol models in many regions.
Charging infrastructure growth is uneven, especially for those without private garages.
Political tensions, tariffs and volatile mineral prices could also threaten supply chains.
The environmental case for plug-in hybrid electric vehicles (PHEVs) is now questioned when drivers do not charge them frequently.
Their real-world emissions may exceed official estimates.
Despite these hurdles, the energy sector cannot ignore the long-term impact.
The IEA anticipates oil demand for cars will continue to decline, with the transition to EVs altering refinery outputs, electricity generation and grid requirements.
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