Battery electric vehicle (BEV) and plug-in hybrid electric vehicle (PHEV) sales continue to climb globally in accordance with transition to net-zero.

Sales reached a record ~2.2M units in September, highlighting the continued success of the industry to date. Although much of these gains are supported by China’s growth within the sector, sales within other countries are also rising at a steady pace as market drivers take effect amongst widening product offerings.

However, a noticeable trend is emerging amongst regions; policy shifts maintain their position as core drivers of adoption but also volatility. New incentives in countries such as Germany and Italy have supported record European sales, whilst the removal of EV purchase tax credits in the USA have resulted in OEM price cuts and production suspensions across multiple manufacturers.

Policy shifts are therefore having a short-term and measurable impact on EV adoption, whilst trade tension continues to spark discussion surrounding industry direction and sourcing strategy.

In addition to shifting regulation, an extending technology frontier demands new thinking of what is possible when it comes to battery and EV performance, and staying relevant and competitive in this environment is now thought of in terms of years and months. This is causing ripples throughout EV and battery supply chains, which are having to adjust in accordance with the rapidly shifting regulation and landscape.

The period 2025-2030 will be a critical one for markets outside China, as many mid-stream and downstream projects are due to come online and begin commercial production. With changing EV estimations, technology preferences and jurisdiction limitations, industry players are directly faced with these evolving challenges. Mid- and downstream suppliers must be more agile than before, all whilst competing against the fast-moving Chinese incumbents.

Perhaps the most impactful shift is seen within the US market, which presents a major opportunity for Asian producers. Chinese supply and project involvement will be effectively prohibited should tariffs and IRA restrictions remain, which opens the door for significant growth from other suppliers.
This began during the Biden Administration, but is now taking place at a greater rate since Trump entered the White House and is expected to remain a defining feature of his time in office. As the USA is projected to have a significant CAM deficit in the coming years when compared with domestic battery cell production, this becomes particularly important for the South Korean and Japanese midstream players who will continue to look towards the USA as their primary market.