For the first time, more than half the new cars sold in China last year were electric or plug-in hybrid. Across the European Union, battery-only registrations hit 1.45 million in 2024, claiming 13.6% of the market even as governments pulled back purchase subsidies. And in Brussels, a binding regulation now requires every new car and van sold from 2035 onward to produce zero tailpipe CO2. Taken together, the numbers mark a threshold: electric vehicles in the world’s two largest auto markets have moved beyond the early-adopter phase and into the mainstream, driven by a combination of falling battery costs, fierce manufacturer competition, and regulation that no longer relies on goodwill.
China’s electric surge outpaces every forecast
China’s electric vehicle market didn’t just grow in 2024. It accelerated. Sales of new-energy vehicles, a category that includes both battery-electric and plug-in hybrid models, rose nearly 40% compared with 2023, according to the International Energy Agency’s Global EV Outlook 2025. New-energy vehicles crossed the 50% threshold of new passenger car sales for the first time, a milestone the IEA had not expected so soon in its 2024 outlook.
The forces behind the shift are structural, not temporary. Battery pack prices have fallen sharply in China, reaching levels widely considered the point at which EVs approach cost parity with combustion vehicles. Domestic manufacturers like BYD have flooded the market with competitively priced models ranging from city cars to premium sedans. Meanwhile, petrol car sales dropped sharply as buyers moved toward electric options, according to data from the China Association of Automobile Manufacturers (CAAM).
The speed of the transition has rattled foreign automakers. European and Japanese brands that once dominated China’s market are losing ground fast, and several have announced joint ventures or platform-sharing deals with Chinese partners to stay competitive. The ripple effects extend beyond China’s borders: Chinese-made EVs are now a growing presence in Southeast Asia, Latin America, and, despite tariffs, Europe.
Europe’s slower burn, backed by law
Europe’s EV adoption curve looks different from China’s, but it may be harder to reverse. Eurostat recorded 1.45 million new battery-electric car registrations across the EU in 2024, giving BEVs a 13.6% share of the new-car market. That growth came despite the expiration of generous purchase incentives in Germany, France, and several other member states, suggesting that regulatory pressure on automakers and improving model availability are now doing more of the heavy lifting than consumer subsidies ever did.
The legal architecture is what sets Europe apart. Regulation 2023/851, adopted in 2023, amended the EU’s existing CO2 performance standards for cars and vans and set a 100% CO2 reduction target for new vehicles by 2035. The regulation does not literally ban internal combustion engines, but its practical effect is identical: after 2035, no new car or van sold in the EU may emit CO2 from its tailpipe. Compliance is measured at the manufacturer level, based on the average emissions of every vehicle sold, which means even a handful of petrol models in a lineup must be offset by a much larger volume of zero-emission cars.
Automakers pushed back hard on the pace of the transition, and in May 2025 the Council of the European Union approved a flexibility mechanism allowing adjustments to compliance calculations for the 2025 through 2027 period. That decision gave manufacturers more room to manage near-term fleet averages while ramping up EV production capacity and securing battery supply chains. Critically, however, it did not touch the 2035 deadline. The destination remains fixed; only the on-ramp got wider.
Volkswagen, Stellantis, and Renault have all announced accelerated EV platform rollouts timed to the tightening targets. For these companies, the investment decisions are already made, factories are being retooled, and supplier contracts are signed. Walking that back would be more expensive than pressing forward.
What could still slow things down
Crossing a tipping point is not the same as completing a transition, and several obstacles could determine whether the shift is smooth or turbulent.
Charging infrastructure in Europe remains uneven. Western European countries like the Netherlands and Germany have relatively dense public charging networks, but southern and eastern member states lag far behind. The IEA’s Global EV Outlook reports flag infrastructure gaps as a risk to adoption rates, particularly for drivers without home charging and for long-distance freight corridors. The EU’s Alternative Fuels Infrastructure Regulation (AFIR), which took effect in 2024, mandates minimum charging coverage along major highways, but deployment timelines vary by country.
China’s policy trajectory after 2024 is less transparent. The purchase-tax exemptions and local subsidies that helped propel EV sales have not been confirmed for extension in their current form. CAAM data confirms the sales trajectory, but how much of the growth reflects genuine consumer preference versus government support is difficult to untangle. If incentives are pulled back abruptly, growth could decelerate. If they remain generous, the competitive pressure on foreign automakers, already intense, will only increase.
Battery raw material prices remain volatile. The recent decline in lithium and nickel prices has been a tailwind for EV affordability, but those markets are cyclical. Supply constraints, whether from mining bottlenecks, trade disputes, or resource nationalism, could push costs back up and complicate the economics of mass-market EVs in both regions.
Politics can still intervene. The EU’s 2035 target includes a review clause scheduled for 2026, which will assess progress and could, in theory, lead to adjustments. No formal proposal to weaken the target has surfaced as of June 2026, but a shift in the European Parliament’s political composition or sustained industry lobbying could put the timeline under pressure. In China, trade tensions with the United States and EU, particularly around EV tariffs, add another layer of uncertainty to the export-driven growth model.
What the shift means for car buyers weighing their next purchase
For anyone weighing their next vehicle purchase, the practical implications are already concrete. In the EU, automakers are legally required to sell a rising share of zero-emission vehicles every year through the early 2030s, with a complete shift for new cars and vans by 2035. That regulatory certainty means combustion models will see declining investment, fewer new launches, and eventually reduced dealer support. Buyers choosing a petrol or diesel car today are buying into a technology that the industry is actively winding down.
In China, the market has already tipped. With more than half of new car sales going electric or plug-in hybrid, the ecosystem of dealerships, service networks, and charging stations is reorganizing around battery-powered vehicles. Resale values for combustion cars in major Chinese cities have begun to soften as buyer preferences shift.
None of this means internal combustion engines will vanish overnight. Hundreds of millions of petrol and diesel cars remain on roads worldwide, and the used-car market will sustain them for years. But the direction is no longer in doubt. In the two markets that together account for roughly half of global new car sales, the question is no longer whether electric vehicles will dominate. It is how quickly the remaining gaps in infrastructure, affordability, and political will can be closed.
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*This article was researched with the help of AI, with human editors creating the final content.
