The global transition to electrified vehicles is following very different paths across the major markets, with China moving fastest, Europe progressing under a strong regulatory framework and North America following a more mixed trajectory. These differences have direct implications for lubricant demand, with conventional engine oils remaining important for longer in some markets while e-drive, hybrid and thermal-management fluids gain ground.
China is the clear leader. Almost 55% of new cars sold in 2025 were electric and the country accounted for six out of every 10 electric cars sold globally, according to the International Energy Agency. Europe recorded a strong rebound, with electric-car sales reaching 4.2 million units in 2025, equivalent to 28% of new-car sales across the region. Norway remains the extreme case, with electric cars accounting for about 97% of new-car sales in 2025. The European market remains more diverse, however, and the existing fleet will continue to contain large numbers of ICE vehicles and hybrids for many years.
European policy is also becoming more flexible. The European Commission has proposed allowing plug-in hybrids, range extenders, mild hybrids and some ICE vehicles to continue playing a role after 2035, while maintaining a substantial reduction in fleet emissions. For lubricant suppliers, this reinforces the likelihood of a prolonged mixed-powertrain market rather than a rapid transition to an all-electric fleet.
Across the rest of Asia-Pacific, electrification is developing at different speeds. Southeast Asia recorded rapid growth in 2025 and the IEA expects electric-car sales in Asia-Pacific excluding China to increase by more than 50% in 2026. India is also expanding rapidly, while electric two- and three-wheelers are particularly important across emerging Asian markets. At the same time, rising vehicle ownership and motorisation are supporting continued demand for conventional lubricants.
North America is following a slower and more complicated trajectory. Electric cars accounted for less than 10% of US new-car sales in 2025, leaving the country well behind China and Europe in penetration terms. Major automakers are also putting greater emphasis on hybrids, plug-in hybrids and range-extender vehicles as they respond to consumer demand and reconsider the pace of their battery-electric programs. Ford has delayed or cancelled some planned EV investments while expanding its hybrid and extended-range strategy, while GM has also adjusted its EV plans and expanded its hybrid offering.
This divergence has important consequences for lubricant manufacturers. China is moving rapidly toward a market dominated by electrified new vehicles, while Europe is combining strong EV growth with regulatory flexibility and North America is extending the role of hybrid and ICE powertrains. Emerging Asian markets are adding vehicles while electrification develops alongside rising motorisation.
The result is a global lubricant market operating across several powertrain eras simultaneously. Engine oils will remain important across much of the global fleet while hybrid fluids, e-drive lubricants and thermal-management products expand in markets where electrification is advancing fastest.