The first half of the 2020s has been a period of unprecedented change and upheaval for the global auto industry. The coming decade is projected to accelerate that process. Since 2020, there has been a global pandemic, a severe semiconductor shortage, and a wide range of other supply chain disruptions. All of this has come against a backdrop of the industry investing hundreds of billions of dollars to transition from the internal-combustion engine (ICE) that has dominated for most of the past 140 years.
Heading into the second half of the decade, the situation is getting even more complicated as government policies that have driven electrification are being upended unevenly across markets, and the cost of battery-electric vehicles (BEVs) has remained stubbornly high. As a result, automakers that had planned to sunset the development and production of ICEs are having to reverse course and continue spending on traditional technologies while also expanding efforts on intermediate electrification, including hybrids (HEVs), plug-in hybrids (PHEVs), and extended-range electric vehicles (EREVs). BEVs, EREVs and PHEVs are collectively called plug-in electric vehicles (PEVs).
Further complicating all of this is the specter of geopolitics, particularly trade policy. In January 2025, Donald Trump was inaugurated for a second term as president of the United States. Trump’s policy on trade is largely centered on imposing tariffs on most imported goods, including those from long-time trading partners and geographic neighbors such as Canada and Mexico. The imposition of 25% tariffs on products crossing the borders between the U.S., Canada, and Mexico is projected to lead to major price increases and corresponding drops in sales. While the automotive industry may respond by shifting production between the three countries, that will take several years and also add billions of dollars in unplanned costs. The resulting loss of economies of scale and disruption will also cause retail prices to increase.
Furthermore, the Trump administration is targeting the elimination of new fuel efficiency and emissions rules, set to begin in 2027. This will likely affect powertrain planning by incentivizing automakers to prioritize affordability over efficiency, which may curtail the launch of new EVs.
In this research report, Telemetry Insights provides a forecast of light-duty vehicle (LDV) sales from 2025 through 2035. The forecasts are split up by powertrain configuration — including ICE, HEV, PHEV, EREV, BEV and fuel-cell electric vehicles (FCEV) — across eight market regions with base, conservative, and aggressive scenarios modeled.The forecast model starts from historical global sales data for the period 2012 to 2024, broken down by region and powertrain. The forward-looking forecast model takes into account environmental regulatory policies, market trends, population forecasts, the potential impact of trade policies, charging infrastructure, and other factors in each region. Each region is evaluated independently with the types of vehicles prevalent in each market playing a role in determining the probable propulsion adoption.In the base scenario, global LDV sales are projected to rise from 85 million units in 2025 to 97.7 million in 2035, with a compound annual growth rate (CAGR) of 1.4%. In the conservative scenario, 2025 sales are only expected to reach about 81.5 million units and grow to 88 million units over the next decade with a 0.77% CAGR. The aggressive scenario projects 87.8 million sales in 2025, growing to 103.9 million in 2035 with a 1.7% CAGR.
