The International Energy Agency’s (IEA) Global EV Outlook 2025, released this week, presents further signs that the Agency is retreating from its earlier forecast of peak oil demand by 2030.
In its latest Stated Policies Scenario (STEPS), the IEA estimates that global EV adoption across all vehicle categories will displace just over 5 million barrels of oil per day (mb/d) by 2030. This marks a notable reduction from the 6 mb/d forecast in its 2024 report and is significantly lower than the 8.2 mb/d figure projected in last year’s Net Zero Emissions (NZE) scenario, which the 2025 edition notably omits altogether.
A nearly 1 mb/d downward revision is substantial especially considering that 2030 is now less than five years away. For policymakers, industry stakeholders, and businesses, such changes raise the question of whether further downward revisions may follow. Several key data points and forecasts from the latest report merit closer examination.
Interestingly, the IEA has not revised its projected number of global EVs by 2030 in the STEPS scenario. The 2025 outlook still anticipates 250 million EVs across all vehicle types virtually unchanged from the 2024 report. This compares to OPEC’s projection of 186 million EVs by the same year in its World Oil Outlook 2024. The IEA’s figure represents a nearly fourfold increase from current levels, requiring the addition of approximately 200 million EVs in under five years. This raises important questions about the realism of such growth expectations, especially given current market trends.
Several of those trends are noteworthy. EV sales have plateaued in key markets, with the IEA report noting that sales “stagnated” in Europe in 2024 as government incentives were rolled back. In the U.S., EV sales growth “slowed down significantly” compared to the prior year.
Looking ahead, the IEA has sharply downgraded its 2030 EV sales penetration forecast for the U.S. from around 55% to just 20% citing anticipated rollbacks of EV subsidies and fuel economy standards under the current administration. While the Agency still predicts a recovery in EU sales despite recent stagnation and loosening of targets, the outlook remains cautious.
Another key point is China’s dominant role in the global EV market. Of the 17 million EVs sold globally in 2024, more than 11 million around 65% were sold in China. The IEA projects that China will account for over 150 million EVs by 2030, representing about 60% of the global total. However, this shift from U.S. to Chinese dominance contributes to the reduced oil displacement figure, as China’s EV fleet includes a higher proportion of plug-in hybrids, which still consume oil, and the average oil displacement per vehicle is lower than in other markets.
The future of EV growth remains tied to several critical uncertainties. Much of the market’s momentum to date has been fueled by government subsidies, both direct and indirect. The true sustainability of EV sales remains uncertain once these incentives are withdrawn. Meanwhile, announcements from several major automakers delaying EV investments or re-evaluating their strategies underscore the growing disconnect between policy-driven expectations and market realities.
This cautious approach partly reflects consumer reluctance to pay premium prices for EVs, coupled with slow progress in rolling out charging infrastructure. According to the IEA, public charging capacity will need to grow nearly ninefold by 2030 to support the projected EV stock.
Other pressing challenges include the expansion of power grids and securing the supply of critical minerals. The IEA notes that electricity demand for EVs alone could increase more than fourfold to reach 780 TWh by 2030 at a time when many other sectors are also demanding massive increases in electricity.
While none of these challenges necessarily signal a halt in EV growth, they do suggest a slower pace than previously anticipated.
Despite the IEA’s Executive Director recently claiming the world is entering an “Age of Electricity,” the 2025 EV report appears to tell a different story. Rather than reinforcing a 2030 peak oil demand narrative, it undermines it casting doubt on the assumption that no new fossil fuel investments are needed. The report serves as a timely reminder that data should drive policy not the other way around.
