Global EV sales to reach 23 million in 2026 as SE Asia emerges as key growth market, IEA says

By Romel S. Gurky

Global electric vehicle sales are expected to rise to 23 million units in 2026, representing 28% of all new passenger car sales, as consumers increasingly turn to electric mobility amid high oil prices and governments continue supporting vehicle electrification, according to the International Energy Agency (IEA).

The IEA's Global EV Outlook 2026 said electric car sales surpassed 20 million units in 2025, up 20% from the previous year, meaning one in four new cars sold worldwide was electric. Europe posted the strongest growth among major markets, while China maintained its position as the world's largest EV market with electric vehicles accounting for nearly 55% of new car sales.

The report highlighted Southeast Asia as one of the fastest growing EV markets. Annual electric car sales in the region more than doubled in 2025 to account for nearly 20% of new vehicle sales, led by Vietnam, Indonesia and Thailand. Latin America also recorded 75% sales growth, driven by Brazil and Mexico.

According to the IEA, the ongoing energy crisis linked to the conflict in the Middle East has reinforced the importance of reducing oil dependence. The global EV fleet displaced about 1.7 million barrels of oil consumption per day in 2025, mainly in markets with fuel economy and carbon dioxide emissions standards, including China and the European Union. Some Southeast Asian countries have already expanded or extended EV incentives in response to higher energy prices.

Despite lower global EV sales during the first quarter of 2026 because of weaker demand in China and the United States following policy changes, many regions continued to record strong growth. Sales rose nearly 30% in Europe, increased 80% across Asia Pacific markets excluding China, and climbed 75% in Latin America. Southeast Asia also recorded more than a doubling of electric two and three wheeler sales during the quarter.

The IEA projects the global EV fleet will expand more than sixfold between 2025 and 2035 to reach as many as 510 million passenger electric vehicles under existing policy assumptions. Electric cars could account for around half of global new car sales by 2035, supported by improving affordability, tighter emissions regulations and declining battery costs.

For Southeast Asia, the report expects EV adoption to accelerate further over the next decade as governments combine fiscal incentives with industrial policies that encourage domestic manufacturing. Vietnam could achieve an electric vehicle sales share of more than 80% by 2035, while Indonesia has narrowed the average EV price premium from more than 50% in 2024 to around 40% in 2025.

The report also identifies Southeast Asia as the largest overseas manufacturing base for Chinese automakers. The region accounted for more than half of China's overseas dual internal combustion engine and EV manufacturing footprint in 2025, with Thailand hosting more than 30% of the capacity and Indonesia more than 20%. Production is expected to increase as trade policies increasingly favor local assembly over imports.

The IEA said China continued to dominate the global EV supply chain, producing nearly 75% of the world's electric cars and more than 80% of battery cells in 2025. Chinese automakers supplied 60% of global EV sales and doubled exports to more than 2.5 million units, while Chinese brands accounted for more than half of electric cars sold in Southeast Asia.

The report also noted rapid technological advances across the industry, including software defined vehicles, artificial intelligence enabled driver assistance systems, ultra fast charging technology and vehicle to grid capabilities, which are expected to further improve EV performance and integration with electricity systems.

Editing by Alexander Ginting