24 Sept 2025
Electric vehicle (EV) adoption is expected to lose momentum across several regions, prompting automakers and analysts to revise their forecasts. According to Goldman Sachs Research, hybrid electric vehicles (HEVs) and plug-in hybrids (PHEVs) are poised to capture greater market share as policy changes and regulatory shifts weaken some of the support for pure EVs.
Global EV Outlook: Slower Growth, Rising Role of Hybrids
Electric vehicle (EV) adoption is expected to lose momentum across several regions, prompting automakers and analysts to revise their forecasts. According to Goldman Sachs Research, hybrid electric vehicles (HEVs) and plug-in hybrids (PHEVs) are poised to capture greater market share as policy changes and regulatory shifts weaken some of the support for pure EVs.
Goldman Sachs now projects EVs will represent 25% of global vehicle sales by 2030, down from the earlier forecast of 28%. The long-term outlook has also been lowered, with EVs expected to make up 52% of sales by 2040, compared with the previous estimate of 59%.
Key drivers of the revised forecast include:
Relaxed fuel economy rules in the U.S. and an accelerated phase-out of EV purchase tax credits.
Softer emissions targets in Europe, allowing automakers more flexibility until 2027.
Shifts in automaker strategies, particularly in the U.S., Japan, and South Korea, where hybrids are gaining priority due to regulatory uncertainty and consumer demand.
Profitability OutlookWith EV mandates easing and hybrids gaining ground, Goldman Sachs expects profitability to improve. In North America, automakers could see margins increase by two to three percentage points, translating to an additional USD 15–22 billion in pre-tax profit, compared to about USD 52 billion in operating profits recorded in 2024.
By 2030, HEVs are expected to account for 12% of the global vehicle market (up from 10%), while PHEVs are forecasted to reach 14%. Looking further ahead, PHEVs could make up around 17% of sales by 2040.
Regional Perspectives
China and India: Forecasts remain largely unchanged, with both markets continuing to drive global EV adoption.
United States: Hybrid sales are projected to accelerate, supported by consumer preference for vehicles offering a balance of performance, efficiency, and regulatory compliance.
The detailed article is published by https://www.goldmansachs.com/ can be accessed from https://www.goldmansachs.com/insights/articles/hybrid-adoption-to-rise-as-electric-vehicle-momentum-slows?utm_source=chatgpt.com
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