In 2024, more than one in three new cars sold in China was fully electric, and when plug-in hybrids are included, new energy vehicles accounted for roughly half of the Chinese market. In Europe, electric vehicles held above 20% of new registrations even as the broader car market stalled. Those two data points, drawn from the International Energy Agency’s Global EV Outlook 2025, mark something that industry analysts have been watching for years: the moment when electrification stops being a policy aspiration and starts functioning as a market default.
Combined with European Union legislation that bans the sale of new combustion-engine cars after 2035, the data from these two regions now describes a structural shift. Automakers still building their business plans around internal combustion are not just betting against regulation. They are betting against cost curves, consumer behavior, and supply chains that have already reorganized around batteries.
China’s market has moved beyond the tipping point
China’s electric vehicle boom is no longer a story about government subsidies propping up a fledgling industry. By 2024, the country’s EV sector had matured into a fiercely competitive market where dozens of domestic manufacturers, led by BYD but including brands like NIO, Xpeng, and Li Auto, fought for share by pushing prices down and technology forward. Battery pack costs in China fell below $100 per kilowatt-hour, according to BloombergNEF tracking data, a threshold long considered the point at which EVs reach cost parity with combustion vehicles without subsidies.
The IEA’s 2025 outlook describes this as a self-reinforcing cycle: lower battery prices attract more buyers, higher volumes drive further cost reductions, and cheaper EVs justify stricter government standards because compliance becomes less burdensome for manufacturers. That loop is now spinning fast enough that combustion-engine models are losing ground in segment after segment, from compact city cars to midsize SUVs. China is not just adopting EVs. It is building the global supply chain that makes them cheaper for everyone else.
Europe is consolidating, not retreating
Europe’s EV story looks different on the surface. Sales growth slowed in 2024, and headlines in some outlets framed the market as stalling. But the IEA data tells a more important story: market share held steady. That distinction matters enormously. When overall car sales dip but EVs maintain their slice, it means buyers who switched are not switching back. Charging networks, dealer inventory strategies, and consumer expectations have all shifted enough to establish a new floor.
The regulatory architecture reinforces that floor. Regulation (EU) 2023/851, which amended the EU’s existing fleet CO2 standards under Regulation (EU) 2019/631, requires a 100% reduction in CO2 emissions from new cars and vans by 2035 relative to a 2021 baseline. In practical terms, that is a ban on new internal combustion engine passenger vehicles. Provisional data from the European Environment Agency showed fleet-average emissions continuing to fall through 2023 as zero-emission registrations climbed, and compliance is tracked through a formal monitoring process that requires manufacturer verification before figures become official.
For automakers like Volkswagen, Stellantis, and Renault, the 2035 deadline is not a distant abstraction. Vehicle platforms take five to seven years to develop. Decisions being made in boardrooms right now will determine what rolls off assembly lines in the early 2030s. Any company that has not committed significant capital to electric platforms is already running late.
The 2035 target faces a political challenge, but the law still stands
In December 2025, the European Commission introduced an Automotive Package that proposed softening the post-2035 target from a full 100% tailpipe emission elimination to a 90% reduction, paired with flexibility mechanisms for manufacturers. The proposal was framed around industrial competitiveness and the practical challenges of a hard cutoff.
As of June 2026, that proposal has not become law. The existing 100% target under Regulation (EU) 2023/851 remains the binding legal standard, and any amendment must pass through the full EU legislative process, including approval by both the European Parliament and the Council of the EU. Whether the 90% figure survives that process is genuinely uncertain.
What is not uncertain is the direction. Even a relaxed 90% target would leave combustion engines confined to a narrow slice of the market, likely limited to niche segments or specific use cases. No major automaker has publicly indicated that the proposed softening would cause it to reverse course on electrification investments, and the silence is telling. The economics of battery-powered vehicles have improved to the point where the regulatory target may matter less than the cost curve.
What the data does not yet show
Several gaps remain. The IEA’s China figures rely on external datasets that have not been independently cross-referenced with official Chinese government statistics in the publicly available reporting. The precise market share number can shift by several percentage points depending on whether plug-in hybrids are counted alongside fully battery-electric vehicles, a classification question that different agencies answer differently.
In Europe, the EEA’s final verified datasets for 2024 and early 2025 have not yet been published, meaning the most recent confirmed fleet-average emissions data covers 2023. Until those figures are released, the trajectory must be inferred from partial indicators: manufacturer guidance, order book data, and the IEA’s regional breakdown of recent EV registrations.
The U.S. market, meanwhile, adds a layer of global complexity. American EV adoption has grown but remains well behind China and Europe in market share, and shifting federal policy on emissions standards and EV incentives introduces uncertainty about whether the world’s third-largest car market will follow the same trajectory or diverge. That question has direct implications for global automakers trying to build platforms that work across all three regions.
Two forces pointing the same direction
The strongest case for calling this shift irreversible rests on the convergence of two independent forces. The first is market momentum. The IEA’s Global EV Outlook reports, drawing on verified sales and registration data, show that EV adoption in China is accelerating and in Europe is consolidating. These are not opinion surveys or industry press releases. They are standardized datasets from an international agency, and they show that underlying technology and cost trends are doing much of the work regardless of which party holds power in any given capital.
The second force is binding law. The EU’s 2035 target is published legislation with a defined compliance timeline, not a campaign pledge. It is monitored through official data collection and tracked through downloadable EEA datasets. Even if the proposed 90% adjustment eventually passes, the legal framework will still require a near-total phase-out of combustion engines in new European car sales.
None of this proves that every gasoline or diesel car will vanish on schedule. Used-car markets will keep combustion vehicles on roads for decades. Charging infrastructure gaps persist. Battery mineral supply chains face their own geopolitical risks. But in the two markets that together account for roughly half of global new car sales, the center of gravity has already moved. The question for automakers is no longer whether to electrify. It is whether they moved fast enough.
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*This article was researched with the help of AI, with human editors creating the final content.
