As the global push for EVs accelerates, the race to make them more efficient and accessible continues to transform the automotive industry. With rising demand, manufacturers are scaling production while prioritizing innovations that lower costs and retail prices, making EVs a viable option for more consumers. Driven by the need to overcome challenges including supply chain constraints, high production expenses, and evolving sustainability standards, these trends could shape the EV market in 2025. Additionally, growing interest in battery technology is extending beyond EVs with the rising star being defense applications, driving advancements in energy storage for drones, satellites, and other mission-critical systems.
Global EV Adoption
In 2024, the global shift toward EVs accelerated, with sales climbing to 17 million by year-end, up from nearly 14 million in 2023, a year that had already seen a 35% rise from 2022. The first quarter of 2024 recorded a 25% increase in sales compared to the same period in 2023. As a result, EVs now represent 20% of total car sales worldwide. China leads the market, followed by the US and Europe. Indeed, a total of 12 million EVs are expected to be sold in China in 2024, with BYD accounting for a record 4.3 million alone, far more than the target of 3.6 million it had set. Compared to 2023, China sold 8.1 million EVs, which was already a 35% increase from 2022. Similarly, the US EV market hit a record 1.3 million EVs in 2024, the equivalent of 8% of all new vehicle purchases, and up from 1.2 million the previous year. Tesla led the market, representing almost 50% of all EV sales. In Europe, sales should reach 1.9 million in 2024, with a market share of 16.6%. Furthermore, the EV market is expected to end 2025 with a market share of 20.4%, representing a 43.4% jump. Globally in 2025, EVs are poised for substantial growth, with global sales anticipated to rise by 30%. Indeed, they are expected to make up 16.7% of worldwide vehicle sales, an increase from 13.2% in 2024.
While this surge in EV adoption is reshaping the automotive market, it’s also accelerating advancements in technology and sustainability. Indeed, the rapid pace of growth highlights both opportunities and challenges for OEMs striving to meet demand while enhancing performance and reducing environmental impact. Consequently, these dynamics are driving innovations that aim to redefine 2025 for EVs and their supply chains.
EV 2025 Trends
Next-Gen Technologies
In the rapidly evolving landscape of battery technology, recent advancements including those in solid-state batteries and dry coating are expected to revolutionize EVs. Solid-state batteries, which replace liquid electrolytes with solid materials, offer significant improvements in energy density and safety. OEMs including LG Energy Solution, Samsung and Mercedes-Benz are actively developing solid-state batteries aimed at extending EV ranges by approximately 80%, all while achieving an energy density of 450 Wh/kg.
In addition to solid-state batteries, dry coating technology is transforming battery manufacturing by eliminating the need for solvent-based processes and energy-intensive drying steps. This has the potential to reduce energy consumption and CO₂ emissions by up to 40%, significantly enhancing the sustainability of battery production. As a result, Tesla is pushing to integrate dry coating technology into its 4680 battery cell production, aiming to reduce costs and improve manufacturing efficiency. Indeed, this technology has the potential of lowering manufacturing costs by over 18% and cutting equipment investment by 41%. While Tesla has faced challenges with scaling the process, particularly achieving the required precision in coating thickness and managing excessive heat during mass production, it remains a key part of the company’s strategy to vertically integrate battery production and make EVs more affordable.
Sustainability in EV Manufacturing
The EV industry is making strides toward sustainability by focusing on recyclable batteries, low-carbon manufacturing processes, and responsible sourcing of materials. A key component of this effort is the recycling of critical materials such as lithium, nickel, cobalt, and copper. Indeed, Redwood Materials, founded by Tesla co-founder, J.B. Straubel, has developed a proprietary process that recovers up to 95% of these materials from used batteries and other sources, reducing the environmental impact of EVs and lowering battery costs.
For the materials needed to produce EV batteries, demand continues to rise while the supply is expected to fall short of the required levels. In the case of copper, by the early 2030s, the gap between demand and supply could exceed 6 million tonnes annually, with copper usage increasing from 25 million metric tons in 2021 to 39 million metric tons by 2040. However, mining production is forecasted to grow by only 16% by 2040, a stark contrast to the 56% increase needed to meet demand. While recycling helps fill some of the gap, the industry must focus on developing new mining operations and improving recycling techniques to address the anticipated supply challenges.
Battery Supply Chain Localization
As nations seek to reduce dependence on regions like China and mitigate geopolitical risks, the global push for localized battery manufacturing is intensifying. Indeed, China’s recent proposal to impose export restrictions on technologies used in producing battery components and processing critical minerals, including lithium, is leading OEMs to want to gain greater control over their supply chains. This includes diversifying sourcing, investing in localized manufacturing, and forming strategic partnerships to reduce reliance on Chinese exports and mitigate potential disruptions. As a result, the US is actively pursuing “friendshoring” strategies to localize its lithium-ion battery supply chain while the European Union has proposed tariffs on Chinese-made EVs to encourage local manufacturing.
Powering Defense
Global Defense Numbers
Over the past year, the global defense sector has experienced a significant surge in investments and deals, reflecting a robust commitment to innovation and security. Indeed, private equity activity in the aerospace and defense industry has notably increased, with 13 deals totaling $1.3 billion announced in Q2 2024 alone. In the USA, defense spending continues to soar, with a staggering $824.3 billion allocated for fiscal year 2024, an increase of $26.8 billion above fiscal year 2023 and marking one of the highest military budgets in history. Similarly in Europe, NATO’s European members have significantly increased their defense expenditures, with total NATO spending rising by 11% in 2024 compared to 2023. This influx of capital is driving advancements in various technologies, including energy storage solutions like batteries, which are essential for modern defense applications. Moreover, the escalating investments and strategic deals highlight the defense sector’s pivotal role in global security and technological progress.
Batteries for Defense
In addition to powering EVs, batteries are becoming critical for defense applications. From drones to satellites and robotics to medical assistance devices on the battlefield, they are driving innovations that enhance operational efficiency, reliability, and adaptability across a wide range of mission-critical technologies. Indeed, US start-up, Lyten, announced plans to invest over $1 billion in a large-scale facility in Reno, Nevada, dedicated to producing lithium-sulphur batteries. These batteries, which offer high density, are light weight, built with abundantly available US materials and 100% local manufacturing, are expected to achieve 10 GWh of production by 2032, targeting applications in drones and satellites.
Similarly, Japanese manufacturer, TDK, announced a breakthrough in solid-state battery technology, achieving an energy density of 1,000 Wh per liter, 100 times greater than its existing batteries. Designed with all-ceramic materials and lithium alloy anodes, these batteries are ideal for energy storage in small devices, including medical implants. TDK plans to ship prototype samples in 2025, with mass production to follow, potentially enhancing the operational efficiency of medical robots and devices.
Driving 2025 EV Growth with Addionics
In a year that’s set to be marked by rapid growth, Addionics, which just announced the world’s first 3D Current Collectors manufacturing facility with a capacity of 0.5 GWh, offers OEMs a way to scale production, improve profitability, and meet global demand for high-performing, cost-effective, and sustainable EVs. By enabling significant cost reductions and enhanced battery performance, Addionics’ 3D Current Collectors directly address the industry’s push for more affordable and efficient EVs. Their chemistry-agnostic design and drop-in compatibility with existing and new manufacturing processes simplify adoption, allowing manufacturers to integrate advanced solutions without added expenses or disruptions. This same versatility and performance make Addionics’ technology an ideal choice for defense applications, where reliability and adaptability are critical for drones, satellites, and other mission-critical systems. Moreover, the reduction in inactive material usage and optimization of active material loading can lower production costs at the same time as supporting sustainability efforts by reducing resource consumption. These advancements align with the industry’s focus on innovative technologies, localized manufacturing, and sustainable practices, helping to accelerate the trends shaping the EV industry in 2025.
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