INDUSTRY REPORT
battery supply chains ; global sourcing trends ; tariff trade barriers ; the rate of technological advancements and the necessary level of support from policymakers to facilitate the shift from fossil fuels to electric alternatives . Currently , China ’ s NEV programme and Europe ’ s “ Fit for 55 ” initiative remain intact to support a sustainable mobility future . Less clear are President Trump ’ s intentions for U . S . electric vehicle support .
Forecasts by region
Analyst S & P Global Mobility has split its forecasts by region , as listed below .
Europe : “ Wrapping up 2024 , the Western / Central European market should deliver just under 15.0 million units (+ 1.1 % y / y ), as customers remain cautious and OEMs continue to finetune their propulsion mix . Into 2025 , this storyline will intensify as strict 2025 emission rules further influence the market mix and topline , we forecast the market flatlining to around 15 million units , up by just 0.1 % y / y — reflecting economic recession risks ; still-high car prices ; tapering EV subsidies ; EV tariffs and political uncertainty in Germany and France ,” said the analyst .
“ Key challenges include the dynamic electrification storyline alongside EU tariffs on mainland Chinese imports ; Trump tariff risks ; hesitant consumers ; a new EU Commission and vigorous lobbying regarding EU emission targets ,” it added .
United States : S & P Global Mobility projects U . S . sales volumes to reach 16.2 million units in 2025 , an estimated increase of 1.2 % from the projected 2024 level of 16.0 million units and reflective of a stilluncertain environment for auto sales levels .
“ 2025 brings with it mixed opportunities and uncertainty for the auto industry as a new administration and policy proposals take hold ,” said Chris Hopson , manager of North American light vehicle sales forecasting for S & P Global Mobility . “ New vehicle affordability issues that coalesced to constrain auto demand levels for much of 2024 will not be resolved quickly in 2025 . Vehicle pricing levels are expected to decline but remain high ; interest rates are expected to shift further downwards but inflation levels are anticipated to remain sticky and new vehicle inventory should also progress , but careful management is also expected . Combined with an uneasy consumer , we project this translates to mild growth prospects for auto sales .”
Mainland China : For last year , the combination of the CNY130 billion extension of New Energy Vehicle ( NEV ) incentives , together with the new CNY75 billion trade-in scheme , 2024 is estimated to recover to at least 25.8 million units (+ 1.4 % y / y ) according to S & P Global Mobility .
“ For 2025 , despite below-par economic activity , the automotive sector will continue to be supported by the NEV and trade-in schemes , along with local government auto incentives , wider government stimulus and the continuation of the vehicle price wars . 2025 demand for Mainland China is forecasted at 26.6 million units , up a further 3.0 % over 2024 levels . The NEV boom is likely to extend into 2025 with electrified vehicle prices benefitting from cheaper battery costs , together with generous national and regional subsidy programmes to help stimulate new vehicle demand . Coupled with full NEV tax exemption through to the end of 2025 , NEV penetration ( as a percentage of passenger vehicles ) is projected to further increase to 58 % in 2025 , from 49 % in 2024 ,” it continued .
Japan : Looking to 2025 , Japanese light vehicle demand should be back in growth mode following a disappointing 2024 . S & P Global Mobility projects sales volumes to reach 4.6 million units in 2025 , an estimated increase of 5.4 % from the projected 2024 level below 4.4- million units . The prospect of U . S . universal tariffs and weaker global economic fundamentals could prove problematic for Japan — a key net exporter of automobiles , especially to North America , although expected slower US BEV growth could offer a silver lining .
20 | ismr . net | ISMR February 2025