Global battery electric vehicle (BEV) market expands by over a third in Q2
The global battery electric vehicle (BEV) market experienced remarkable growth in the second quarter of 2025, increasing by 33% compared to Q2 2024. China was a major driver, making up nearly two-thirds of global sales. Europe also saw strong growth, with BEV sales in the top five markets rising 25% year-over-year in the first half of 2025.
Germany's BEV market bounced back impressively, growing by over a third in the first half of 2025 compared to 2024. Germany and the UK are competing for the top spot in Europe, with Germany leading in Q2. However, the UK had the highest BEV market share among the top five European markets in the first half of the year.
In contrast, the U.S. BEV market fell 3% year-over-year in Q2 2025. However, analysts expect a big increase in Q3 as consumers rush to use the tax credit before it ends in September.
A more pressing challenge for automakers and governments worldwide is ensuring a sustainable supply of rare earth elements (REEs), which are crucial for manufacturing electric vehicles. The reserves and production of REEs are concentrated in a limited number of countries, posing a potential geopolitical risk.
Top findings
- For the first time, the five leading automotive markets in Europe are projected to surpass one million BEV registrations
- Germany has reclaimed its position as Europe's largest BEV market, with a 35% increase in registrations
- BEV sales in China have grown by 42% in Q2 2025, marking the first time sales have exceeded two million units in a single second quarter
- The recovery in demand underscores Europe's reliance on imported raw materials, with 98% of rare earth elements currently sourced from China
The global battle for rare earth elements and how companies can respond
Rare earth elements (REEs) are vital to modern technology, playing a key role in battery electric vehicles, smartphones, and various military technologies. Despite being termed "rare," these elements are relatively abundant, being three times more common in the Earth's crust than copper and 200 times more than platinum or gold. However, REEs occur in low concentrations, making extraction and refining challenging and raising environmental and sustainability concerns.
A significant issue with REEs is their limited geographic distribution. While many countries have sparse or nonexistent reserves, nearly half (48%) of the global REE reserves are in China, which also accounts for over two-thirds (69%) of global production. This concentration creates a geopolitical risk as REE-rich countries can leverage their resources in trade negotiations.
Amid rising trade tensions, REEs and other critical raw materials have become strategic assets for certain nations. To mitigate these risks and diversify their supply chains, countries and companies should consider the following strategies:
- 1Enhance recycling and repurposing efforts
- 2Identify alternative sourcing options
- 3Explore alternative materials
- 4Establish governmental supply contracts
Electric vehicle sales data
France, Germany, Italy, Spain, and UK
In the top five European markets, BEV sales rebounded in the first half of 2025 following a slight decline in 2024.
Germany's BEV market, which faced challenges last year due to the withdrawal of incentives, has shown significant recovery, achieving the highest unit sales in Europe during this period with 249,000 units sold. This surpasses the UK market, which also grew 35% year-over-year in the first half of 2025. However, France saw a 6% decline in sales year-over-year, although this is better than the overall market decline of 8%.
Spain recorded the most substantial growth among the top five European markets, increasing by 84% year-over-year in the first six months of 2025. Although starting from a low base, Spain's BEV market share is beginning to outpace Italy, where market trends have traditionally been similar.
Other European markets
Denmark led the way in BEV growth among other European countries, with a 47% increase in the first half of 2025 compared to the same period in 2024. Norway's BEV market also experienced strong growth, rising 36% to achieve an impressive market share of 94%.
China
BEV sales exceeded two million units in the second quarter of 2025, marking a 42% increase compared to the same period last year. This surge in BEV sales has impacted the plug-in hybrid electric vehicle (PHEV) and hybrid markets, which grew at a more modest rate of 6% year-over-year in Q2. Consequently, BEVs now hold a market share of nearly one-third (32%) in China.
Japan
The Japanese EV market is still dominated by hybrids, which accounted for a market share of 59% in Q2 2025. Nonetheless, both the BEV and PHEV markets are beginning to show growth, although from a low base.
South Korea
BEV sales increased by 41% in the second quarter compared to the same period last year, raising the BEV market share to 13%. With hybrids continuing to dominate, the combined EV market share is nearing 50% for the first time.
BEV sales declined by 3% in the second quarter of 2025 compared with the same quarter last year, marking the first year-over-year quarterly drop since the COVID-affected 2020.
Plug-in hybrid electric vehicle (PHEV) sales fell by 4%, marking the fourth consecutive quarterly year-over-year decline. This trend partly stems from some popular PHEV models becoming disqualified for tax credits due to battery sourcing requirements.
Hybrid sales, however, grew by 36%, continuing the strong growth seen in recent years and reaching a market share of 13%. This expansion is driven by increased product availability and growing consumer interest in electrified powertrains.
About the „Electric Vehicle Sales Review“ by PwC and Strategy&
PwC Autofacts® and Strategy& have analyzed electric vehicle sales worldwide in the second quarter of 2025.
Steven van Arsdale also contributed to this report.
