Shifting Gears: Economic Implications of Electric Vehicles in the Future Energy Landscape

The rapid adoption of electric vehicles (EVs) is reshaping the global
energy and economic landscape. This study examines recent trends
(2023-2025) using statistical tools and market data to assess the
economic implications of EV diffusion. Results show that global EV
sales rose from 14 million in 2023 to 17 million in 2024, with
projections of 20 million in 2025, representing nearly 25 percent of
new car sales. Regression analysis reveals a strong negative
correlation (-0.97) between battery pack prices and EV sales, with
each $10/kWh reduction in costs linked to 1.7 million additional EV
sales. EVs displaced an estimated 1.3 million barrels per day of oil
demand in 2024, demonstrating growing influence on global fuel
markets. In India, over 2 million EVs were sold in 2024, with two and
three wheelers dominating the market. Charging infrastructure
expansion (>1.3 million public chargers added in 2024) and smart
charging strategies are identified as critical to managing future
electricity demand. The findings underscore that EVs are not only
transport innovations but also macroeconomic drivers affecting
Interdisciplinary Engineering and Technology Management (2026)
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energy security, trade, fiscal revenues and industrial
competitiveness. Key recommendations include accelerating battery
innovation and local manufacturing, integrating smart charging into
electricity systems, redesigning fiscal instruments to replace
declining fuel tax revenues, rapid electrification of two and three –
wheelers, e-bus procurement and corridor charging expansion are
identified as high-impact pathways. Overall, the study highlights EVs
as a cornerstone of future energy planning, requiring coordinated
industrial, fiscal and energy policy responses.