In March 2025, the global electric vehicle (EV) market saw significant growth, with sales reaching 1.7 million units in March, up 29% year-on-year. This growth was mainly driven by China and Europe, while North America lagged behind, achieving modest growth of only 12%. Below, China Exportsemi will analyze the reasons for the formation of this phenomenon from multiple perspectives:
1. Chinese market: policy push and strong demand
As the world's largest electric vehicle market, China sold nearly 1 million electric vehicles in March 2025, accounting for nearly 60% of the world's total sales, up 36% year-on-year. The Chinese government's introduction of a series of incentives, such as car purchase subsidies, tax incentives, and new energy vehicle credit policies, has greatly stimulated consumer demand for car purchases.
For example, several local governments have provided subsidies of thousands of yuan to consumers who buy electric vehicles, which has further improved the cost-effectiveness of electric vehicles and attracted a large number of consumers. According to data released by BYD, its sales reached 450,000 units in March, ranking first in global electric vehicle sales, and its hot-selling models such as the Qin PLUS DM-i are favored by consumers due to their affordable prices and excellent performance. In addition, new power brands such as NIO and Xpeng have also achieved sales growth of more than 50%. The strong performance of Chinese brands in the domestic market has also gradually expanded overseas, with China's EV exports exceeding 400,000 units in March, with Europe, Southeast Asia and Central and South America becoming its main export markets.
Chart: Global EV sales soared 29% in March! China and Europe lead the way, why is North America lagging behind?
2. European market: Regulatory push and infrastructure improvement
EV sales in the European market reached 400,000 units in March 2025, up 24% year-on-year. Germany, Italy, and the United Kingdom are the main markets driving the growth of electric vehicles in Europe. Stringent emission regulations, government subsidies, and a growing charging infrastructure are key factors in the booming European EV market.
The EU's carbon emission policy has prompted automakers to increase investment in the research and development of electric vehicles to reduce the proportion of sales of traditional combustion vehicles. At the same time, countries such as Spain and Germany have reintroduced car purchase subsidies and extended tax incentives, which have further boosted consumers' willingness to buy. In addition to the strong performance of local automakers, such as the Volkswagen ID.4 and Renault 5 E-Tech, plug-in hybrid (PHEV) models from China have also achieved remarkable results in the European market. The BYD Seal U (Song PLUS DM-i in China) became the best-selling model in the European PHEV market with 2,281 units sold, further proving the competitiveness of the Chinese brand in overseas markets.
3. North America: Policy lags and infrastructure challenges
In contrast, the North American market is growing more slowly. In March 2025, EV sales in the U.S. and Canada grew by just 12%, with a total of 200,000 units sold. The reason for the slow growth of the U.S. market is mainly constrained by policy factors. The Trump administration's emissions standards policy, as well as new trade policies, have limited the EV market to some extent. The change in tariff policy has made it more expensive to import electric vehicles, which may have weakened consumers' willingness to buy.
In addition, North American consumers have relatively low acceptance of electric vehicles, and the construction of charging infrastructure is not yet perfect. For a long time, the car culture in the United States has mainly been dominated by fuel vehicles, and consumers have great concerns about the range and charging convenience of electric vehicles. Despite Tesla's large share of the U.S. market, Tesla's sales fell by nearly 9% in March 2025, and market analysts generally believe that Tesla's quarterly revenue and earnings per share may face further downward pressure.
4. Global electric vehicle market trends and outlook
The rapid development of the global electric vehicle market has become an irreversible trend, and factors such as policy support, technological progress, and consumer demand are jointly promoting the continuous expansion of the market. With the advancement of battery technology, the continuous improvement of charging infrastructure, and the popularization of intelligent and connected technology, the performance and user experience of electric vehicles will continue to improve, and the market penetration is expected to further increase.
According to the forecast of the International Energy Agency (IEA), the number of electric vehicles in the world will exceed 20 million by 2025, and the global electric vehicle market penetration rate is expected to reach more than 15% in 2026. At the same time, the charging facilities of electric vehicles will also be greatly improved and expanded, especially the promotion of fast charging technology, which will greatly improve the car experience of consumers.
However, while the global electric vehicle market is growing rapidly, it is also facing some challenges. First, the stability of the supply of key raw materials needed for EV production, such as lithium, cobalt, and nickel, remains an open question. According to a report by the International Aluminium Association, global demand for lithium for electric vehicles is expected to grow tenfold over the next decade, posing a huge challenge to the global supply chain. Secondly, the issue of battery recovery and recycling is becoming a growing concern. The increase in the number of electric vehicles worldwide means that the amount of battery end-of-life will increase with it, Therefore, improving battery recycling rates and sustainability will become one of the keys focuses of the industry.
In addition, differences in regional policies, changes in the international trade situation, and instability in global supply chains may also have an impact on supply, price, and demand in the EV market. For example, some countries may adjust their tax policies for electric vehicles or impose trade barriers, which will require companies to be more risk-responsive and adaptable.
5. Conclusion
Overall, the significant growth in global EV sales in March 2025, especially the strong performance of the Chinese and European markets, demonstrates the potential and momentum of the global EV market. However, the lagging growth and market challenges in the North American market have also sounded the alarm bells for the development of the industry. In the future, the coordinated development of the global electric vehicle market will still face many challenges, and policy support, infrastructure construction and technological innovation will be the key. Governments, enterprises and industry parties should strengthen cooperation to jointly promote breakthroughs in electric vehicle technology, improve the adaptability of the global market, and ultimately achieve the sustainable development of the electric vehicle industry.
