Global Electric Car Market Poised to Grow to 23 Million in 2026 Amidst Energy Crisis: IEA Report

Global demand for electric passenger vehicles (e-PVs) is slated to grow by 15% this year to 23 million units in CY2026, representing 28% of total e-PV sales. A fair portion of this demand will be driven by the ongoing energy crisis caused by continuing conflict in the Middle East, which has brought reliance on oil imports into sharp focus in many countries, including India, which imports over 80% of its crude oil requirements.

In CY2025, electric car sales grew by 20% globally to exceed 20 million units, meaning one-quarter of all new e-PVs sold were electric. In CY2025, around 2,500 passenger vehicle models were available worldwide. Nearly 1,000 of these were electric, about 40% of the total, up from about 35% in CY2024. Counting both battery electric and plug-in hybrid electric models, the number of electric models has more than doubled in the past five years. More than 100 countries recorded electric car sales growth last year, and in one-third of these, they represented at least 10% of new car sales. Chinese automakers supplied 60% of global electric car sales in CY2025, while European and North American automakers were each responsible for about 15% of global sales. In CY2026, as a result of the ongoing West Asia crisis, electric cars are poised to make up a greater share of total global car sales. 

According to the Global EV Outlook 2026 report released by the International Energy Agency (IEA), Europe is poised for the largest growth among major markets, with sales projected to increase by around 20% in 2026, such that one in three cars sold is electric. In China, electric car sales are set to grow across CY2026, albeit at a slower rate than in previous years, to reach almost 60% of total car sales. Sales across Asia-Pacific countries other than China are expected to grow by over 50%, while sales in Latin America are projected to rise by 45 percent. The wider economic impacts of the conflict in the Middle East might temper overall car sales. In many regions, however, there is upside potential to the 2026 EV forecast, depending, in part, on how, when and which policies are enacted amid the current energy crisis.

As the IEA report points out, the current high oil price environment is drawing consumer attention to the economic benefits of driving EVs. Electric cars generally have lower running costs than internal combustion engine (ICE) vehicles, mainly due to their higher efficiency. The recent rise in oil prices resulting from the conflict in the Middle East has further increased the cost savings associated with driving an EV. For corporate fleets that travel long distances, the running cost savings can be several

times larger than for the general consumer. Preliminary signs suggest EV sales are increasing in countries with supply concerns or where fuel price increases have been particularly steep. It would be fair to surmise that due to rising petrol, diesel and CNG prices, a growing number of ICE vehicle users will finally make an EV purchase decision this year. 

Retail sales crossed the 24,000 mark for two months in a row in March and April. Cumulative January-April (86,773 units) are already 44% of the record 195,179 e-PVs sold in India in CY2025.

Electric Car and SUV Sales in India Jump 65% in January-April to 86,773 Units
As per the latest IEA report, “Electric car sales broke records in many markets during the first quarter of 2026. Global sales, at around 3.9 million, were 8% lower than over the same period last year, primarily because of lower sales in China and the United States following key policy changes. However, this overall decline masks strong sales growth in many countries: in Europe, sales were up close to 30% year-on-year; countries in Asia Pacific excluding China saw year-on-year sales growth of 80%, and sales across Latin America were up by 75%. In March 2026, around 30 countries saw record-breaking monthly sales, and a further 60 countries recorded year-on-year sales growth. Preliminary April data shows that monthly electric car sales in China grew to a record high of over 60% of total car sales, even if year-to-date electric car sales remained lower than in 2025.”

In India, demand for zero-emission passenger vehicles (hatchbacks, sedans, SUVs and MPVs) has witnessed strong growth in the first four months of this year. Between January and April 2026, the 17 electric car and SUV manufacturers have delivered 86,773 units to customers, which marks robust 65% YoY growth (January-April 2025: 52,743 units). This total is already 44% of the record 195,179 e-PVs sold in India in CY2025. Given the same growth trajectory, e-PV sales in India this year should easily cross the 250,000-unit mark. If the pace of demand rises even more due to additional price hikes in petrol, diesel and CNG through the year, e-PV sales could even cross the 300,000 milestone for the first time. 

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