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In many countries, EV sales are driven by government subsidies, which doubled in 2021 and reached a Electric vehicle (EV) adoption is accelerating, driven by environmental policies, advances in battery technology and improving cost competitiveness.  Global electric car sales exceeded 20 million units in 2025, accounting for 25% of all new car sales.  IEA projects sales to reach approximately 23 million in 2026, or 28% of the global market.  By 2035, the global EV fleet could exceed 500 million vehicles, under the IEA’s current-policy scenario [2].

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Public subsidies

  

Government support remains important, nut its relative weight is declining.  In 2025, public spending on electric cars reached approximately USD 60 billion, representing less than 7% of total EV spending.  Market growth is increasingly driven by falling battery costs, broader model portfolios and intensifying competition, particularly from Chinese automakerss [3].

  

Benefits

  

In addition to the clear benefits in terms of sustainability (i.e., CO2e emission mitigation), one of the major advantages of using electric motors instead of exhaust systems concerns the energy efficiency.  BEV´s battery-to-wheel efficiency can range from about 80% to 90% (instead of 30% of fuel-to-wheel in ICE vehicles), depending on how regenerative braking system is accounted for.  Another advantage of BEVs is the fast and precise torque generation, even at low speed, while ICE vehicles only produce useful torque in a narrow band of the RPM engine.  Also, BEVs have one moving part for each hundred moving pieces in ICE, which can result in significant savings on maintenance & materials [4].

  

Challenges

  

Despite their growing adoption, BEVs face several challenges, particularly battery cost, charging time, supply-chain constraints and safety. Batteries account for approximately 30–40% of a BEV’s cost [5],  while long charging times remain a concern for long-distance travel.  Lithium-ion batteries dominate the EV market, relying on critical minerals such as lithium, cobalt and graphite [6].  China dominates battery manufacturing and the processing and refining of several key materials, creating supply-chain concentration risks.

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Battery costs are also exposed to commodity-price volatility. In 2022, lithium carbonate prices surged, and battery-pack prices recorded their first annual increase in more than a decade [[7]]. Electric motors add another material dependency: many BEVs use approximately 2–5 kg of rare earth magnets, although quantities vary by motor design.

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Tesla vs BYD

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China’s BYD has overtaken Tesla in the global electric vehicle market.  In 2022, BYD became the sales leader when both battery-electric vehicles (BEVs) and plug-in hybrids (PHEVs) were counted.  In 2025, it also surpassed Tesla in annual BEV sales, selling approximately 2.26 million units, compared with Tesla’s 1.64 million [CNEVPOST, 2026].  Including plug-in hybrids, BYD sold nearly 4 million plug-in vehicles in 2025, reinforcing its global leadership [IEA, 2026].  Its scale, vertically integrated supply chain, battery technology and broad product portfolio underpin its competitive position, while Tesla faces intensifying competitio.  Figure 1 compares the companies’ shares of the global EV market in 2025.