Electric vehicles (EVs) are reshaping transportation across land, sea, and air, with a projected market value of $3.6 trillion by 2045 1. According to IDTechEx’s latest report, “Electric Vehicles: Land, Sea, and Air 2025-2045,” over 40 million EVs (spanning more than just cars) were sold in 2024, a figure expected to soar to 143 million by 2045. This growth is driven by an evolving mix of regulatory mandates and cost-saving incentives across 11 diverse sectors. However, recent shifts in policy and economic conditions have introduced new challenges and opportunities for the EV industry. How will these changes impact EV adoption—from passenger cars to mining vehicles?
CO₂ Regulation and the Evolution of Electric vehicles
The Electric vehicles sector remains the largest contributor to EV sales, with battery demand and market value set to dominate the industry for the next two decades. Cars are a significant source of global greenhouse gas emissions, making them a primary target for electrification policies. However, regulatory landscapes are shifting as political and economic factors influence policymaking.
In the United States, the transition to a new administration in 2025 has brought a marked shift in tone regarding EV adoption. Executive Orders have reduced federal support, including tax credits and funding for the National Electric Vehicle Infrastructure (NEVI) program. Additionally, there is increased resistance to California’s ability to set independent emissions standards, alongside relaxed tailpipe emission regulations through 2032.
Similarly, in Europe, automakers and policymakers have pushed back against stringent CO₂ fleet average regulations. In early 2025, the European Commission responded by allowing automakers to “phase in” compliance, averting billions in potential fines. While this benefits less-electrified manufacturers, it reduces the value of emissions credits for leaders like Tesla and Volvo. Despite calls for a “technology-agnostic approach” that could include hybrids and alternative fuels, the EU’s 2035 ban on internal combustion engines (ICE) remains—though it faces growing opposition.
Will Weaker Regulations Stall EV Growth?
Despite these policy headwinds, IDTechEx predicts that EV adoption will continue, albeit at a potentially slower pace in certain regions. Battery prices ($/kW) are steadily declining, and OEMs have already invested billions into EV research, development, and production facilities. Even without aggressive regulatory mandates, lower operational costs—such as reduced fuel and maintenance expenses—are expected to drive consumer demand.
China serves as a compelling case study of market-driven EV adoption. Although subsidies were phased out due to rapid adoption rates distorting the emissions credit market, EV sales reached 12.8 million units in 2024. This demonstrates that once a critical mass of adoption and charging infrastructure is achieved, market forces can sustain momentum. While softer regulations in major markets like the U.S. and EU may delay widespread adoption, IDTechEx forecasts annual EV sales to reach 70 million units globally by 2045.
Beyond Passenger Cars: Total Cost of Ownership (TCO) Drives Electrification
Outside the realm of passenger cars, other vehicle segments—such as construction equipment, mining vehicles, and heavy goods trucks—are at varying stages of electrification. These sectors share a common driver: total cost of ownership (TCO) . TCO encompasses both the purchase price and lifetime operating costs of a vehicle.
While electric options often come with higher upfront costs compared to their diesel or petrol counterparts, operational savings can offset this disparity. For example, IDTechEx analysis shows that a mining haul truck might spend up to $8.6 million on diesel fuel over its lifetime. In contrast, an electric equivalent powered by efficient batteries could reduce fuel costs to approximately $3.1 million, even when accounting for the higher initial investment in battery technology. Such financial incentives make electrification an attractive proposition for operators focused on long-term profitability.
Regulation plays a weaker role in these sectors compared to passenger cars. Instead, businesses are motivated by operational efficiencies and cost reductions, which are becoming increasingly achievable as battery technologies improve and electricity costs remain competitive.
The Road Ahead: Balancing Policy and Market Forces
A softening regulatory environment may slow Electric Vehicles adoption in sectors heavily reliant on government mandates, such as passenger cars. However, industries where total cost of ownership is the primary consideration are likely to see continued progress toward electrification, driven by financial savings rather than enforced regulations.
As the Electric Vehicles landscape evolves, stakeholders must navigate the interplay between policy changes and market dynamics. While regulatory shifts may introduce short-term uncertainties, the overarching trend toward electrification remains robust. Innovations in battery technology, coupled with declining operational costs, ensure that EVs will play a pivotal role in shaping the future of transportation across land, sea, and air.
For more insights into the future of electric vehicles, including detailed forecasts and analysis, visit www.IDTechEx.com/EVMaster .
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