Breakdown: EVs May Dominate the Headlines—But Not the Driveway

Electric vehicles seem to have stolen the spotlight in the world of automotive technology, but that doesn’t mean they are the most popular choice among consumers right now, according to the 2025 Joint Powertrain Trends and Outlook Forecast presented by the Auto Care Association, in partnership with MEMA Aftermarket Suppliers.

Key findings were revealed at the Automotive Aftermarket Products Expo in November where strategists of PwC Strategy& unveiled some of the most significant factors driving the U.S. and Chinese markets in 2025 and beyond.  

Why China is Outselling the U.S. in EVs

Akshay Singh, a partner in PwC's U.S. Automotive Advisory practice, noted that while China sits at 30% market penetration in the EV market, the U.S. lags behind at only 7%. He attributes the stark contrast to vehicle economics and the total cost of ownership, including:

• Government regulations as they relate to certain vehicles
• Whether there are enough models for consumers to choose from
• Whether consumers are willing to wait for a vehicle to charge
• Whether enough charging infrastructure is available.

“If you don’t have the charging infrastructure availability, then you'll probably see a low adoption rate,” he points out. “These are the different factors we look at and see how each of the factors are trending.”

For instance, he notes, EVs are still about 20% more expensive in the U.S. compared to their counterparts with internal combustible engines. To break it down further, he points out that 33% of EVs cost more than $80,000 in the U.S., which only serves about 2% of the market. Meanwhile in China, 50% of the EV models are less than $25,000, which clearly serves a wider client base.

“It's essentially giving more prospective EV buyers an affordable entry point,” Singh says. “It's not just limited to a luxury segment. So, that's a big reason that EVs are growing in China is because of affordability and hybrid EV models.”

BEVs Outshining EV Counterparts

And while the majority of the industry seems to be hyper focused on EVs, hybrids such as Battery Electric Vehicles appear to be climbing in popularity at a higher rate, says Keshav Chaudhary, Senior Manager for PwC Strategy&.

“When it comes down to the residual value of these hybrids … they're actually holding their value much better than their ICE counterparts, and we feel one of the reasons this is happening is all the BEVs coming to market, the consumers are much more accepting of having a battery in their car,” Chaudhary explains. Years ago, there was a lot of uncertainty around how the battery life of these BEVs were going to turn out, but now, most of them have credibly shown batteries are lasting eight to 10 years with minimal degradation. So, consumers are very open to having batteries and buying used hybrids as well. And on an overall cost basis, hybrids make a lot of sense.”

Singh noted that battery costs have gone down almost by 20% in the last year and predicted that prices will continue to “go down substantially in the next three or four years.” He adds that China’s willingness to embrace this technology is putting them ahead in the race for more affordable vehicle ownership.

“Right now, there's a lot of policy support in China across the value chain, and it's boosting EV adoption,” he noted. “There's some policy shift in China, but there's a lot of incentives that are available. There are lot of regulations in China that are available. There are local electrification policies. But again, it is helping with the growth. But the number-one reason that the costs have come down substantially, is the growth of EV infrastructure, whereas in the U.S., as you know, there are some regulatory headwinds.”

While some sources cite an infiltration of hybrids encompassing around 50% of the market, PwC Strategy& team members estimated it to weigh in more like 24% of the market by 2030.