Author: Mika Takahashi, Technology Analyst at IDTechEx
Electric vehicles across land, sea, and air have seen tremendous growth over recent years. According to IDTechEx’s latest report, “Electric Vehicles: Land, Sea, and Air 2025-2045“, over 40 million EVs (not limited to cars) were sold in 2024, with that number expected to top 143 million in 2045. Across the 11 diverse sectors covered in the report, an evolving mix of regulatory and cost-saving factors drives customers and manufacturers toward electrification. However, recent years have also seen evolution within the regulatory landscape as governments and OEMs adjust targets based on political and economic headwinds. How will changes in policy manifest in EV growth, from cars to mining vehicles?
COâ‚‚ regulation focused sectors – Cars
In terms of battery demand and market value, IDTechEx forecasts electric cars to remain the largest single sector for EVs throughout the next 20 years. With well over a billion cars on global roads, they are a significant contributor to global greenhouse gas emissions and have been a natural target for electrification for policymakers. However, regulations are not set in stone. A changing political and economic landscape has resulted in new attitudes and approaches to regulating car markets.
2025 heralds a new administration into the White House, bringing a markedly different tone regarding electric cars than the previous Biden Administration. A slew of Executive Orders has set the tone, seeking to reduce federal support (such as tax credits and NEVI), restrict California and other states’ rights to set independent emissions standards, and water down the EPA’s emissions tailpipe standards through to 2032.
In Europe, consistent and public criticism by OEMs and politicians has been targeted at the EU’s COâ‚‚ fleet average regulations. The European Commission initially held firm, but in early 2025, under mounting pressure, relented and announced that automakers would be allowed to ‘phase in’ the latest tranche of regulations. This will likely avoid billions in potential fines this year and benefit the least electrified automakers. Highly electrified manufacturers (such as Tesla and Geely’s Volvo) now face a drop in revenue, as the emissions credits they sell to other OEMs are no longer required to the same extent. The 2035 ICE ban in Europe remains for now, but this also faces significant opposition, with calls for the inclusion of a ‘technology agnostic approach’, opening the door for hybrids and synthetic/alternative fuels.
Where does all this leave the electrification of cars? As reported in “Electric Vehicles: Land, Sea, and Air 2025-2045”, electric car sales have grown to over 18 million in 2024. A large part of this has been a regulatory push offering consumers incentives and encouraging OEMs through compliance mechanisms. Would softer/abandoned EV goals stop electrification in its tracks?
The answer is likely not. Battery prices ($/kW) continue to drop, and OEMs have invested billions of dollars in EV research, development, and production facilities. IDTechEx also expects that as EV prices continue to decrease, greater efficiencies and lower charging costs (relative to refueling costs) will continue to make the total cost of ownership of an EV lower than that of a comparable ICE car. Softened regulations could slow the adoption rate, particularly among OEMs less committed to electrification. China offers a good example of a case study of what a successful, market-driven EV environment looks like. Although in China, regulations were withdrawn for a different reason (adoption far outpaced expectations, leading to a distorted emissions credit market), in 2024, 12.8 million EVs were sold. Electrification rapidly improves its outlook at a certain critical mass of adoption and charging infrastructure. If major markets such as the US and EU see a significant reduction in policy-driven electrification, it may delay market-driven adoption, but IDTechEx still expects 70 million annual unit sales by 2045.
Where TCO matters more than anything else
Away from the world of cars, there are still many vehicle segments at various stages of electrification. Construction vehicles, mining vehicles, and heavy goods trucks fulfill multiple roles in transportation and industry, but they are alike in being highly sensitive to the total cost of ownership (TCO). TCO is a combination of the purchase price of a vehicle and the cost of operating it throughout its lifetime. Electric options are often more expensive than an incumbent diesel/petrol vehicle – this becomes especially apparent for larger vehicles with bigger batteries (for example, mining haul trucks). However, fuel costs contribute significantly to the TCO for many of these vehicles. In “Electric Vehicles: Land, Sea, and Air 2025-2045“, IDTechEx analysis indicates that while a mining haul truck might spend up to US$8.6 million on diesel throughout its lifetime, higher efficiency and lower electricity costs ($/kWh) could reduce the fuel costs to US$3.1 million for an electric haul truck which even when accounting for the much higher cost of a battery still provides a positive TCO outlook. In many of these sectors, regulation is a weak driver to adoption. Instead, operators and OEMs alike will be driven towards electrifying because of the financial savings.
A softening regulatory environment will likely delay battery electric vehicle adoption growth, particularly for the most regulation-dependent sectors, such as cars. However, many other vehicles are at the earliest stages of electrification that will be driven by operational savings rather than enforced regulations.
For more information on this report, including downloadable sample pages, please see www.IDTechEx.com/EVMaster.
For the full portfolio of electric vehicle market research available from IDTechEx, please see www.IDTechEx.com/Research/EV.
About IDTechEx
IDTechEx provides trusted independent research on emerging technologies and their markets. Since 1999, we have been helping our clients to understand new technologies, their supply chains, market requirements, opportunities and forecasts. For more information, contact research@IDTechEx.com or visit www.IDTechEx.com.
