Car Market Leads USD 1.61 Tn in 2025 at 11.15 CAGR

Car Market Trends 2025: Gasoline Dominance, EV Surge, and Key Regional Growth Insights

The global car market, valued at USD 1.44 trillion in 2024, is anticipated to reach USD 4.16 trillion by 2034, growing at a CAGR of 11.15% over the next decade. Asia Pacific led the car market in revenue, while North America is set to grow significantly. Gasoline cars held the largest share, but electric vehicles are gaining fast. The market was dominated by individual use, with commercial use also rising.

Car Market Growth, Innovations and Market Size Forecast

The car market is projected to reach USD 4.16 trillion by 2034, expanding from USD 1.61 trillion in 2025, at an annual growth rate of 11.15% during the forecast period from 2025 to 2034. The rising demand for luxury cars in developed nations along with rapid investment by automotive companies for manufacturing numerous types of cars is playing a vital role in shaping the industrial landscape.

Moreover, the growing adoption of eco-friendly cars by fleet operators to reduce vehicular emission coupled with technological advancements in the car manufacturing sector has contributed to the market expansion. The research and development activities related to autonomous vehicles is expected to create ample growth opportunities for the market players in the upcoming days.

Car Market Growth and Trends 2025

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Introduction

The car market is a crucial sector of the automotive industry. This industry deals in manufacturing and distribution of various types of cars in different parts of the world. There are various types of vehicles developed in this sector comprising of hatchbacks, sedans, SUVs, sports cars and some others. These cars are powered by numerous propulsion technology including gasoline, diesel, electric and FCEVs. The end-users of these cars consist of commercial fleets and individual consumers. The growing production of passenger vehicles in developing nations has contributed to the industrial expansion. This market is expected to rise significantly with the growth of the EV sector around the globe.

Highlights of the car market

  • Asia Pacific generated highest revenue of the car market.
  • North America is expected to rise with a significant CAGR during the forecast period.
  • By propulsion, the gasoline segment held the largest share of the market.
  • By propulsion, the electric segment is expected to rise with a notable CAGR during the forecast period.
  • By end use, the individual segment led the market.
  • By end use, the commercial segment is expected to grow with a considerable CAGR during the forecast period.

The major trends in this market consists of partnerships, business expansions and rising sales of EVs.

Partnerships

  • Several automotive brands are partnering with car rental companies to deploy electric vehicles for increasing profit margins. For instance, in May 2025, BYD partnered with Car Inc. This partnership is done for deploying BYD’s EVs for rental operations across China.(Source: Cnevpost)

Business Expansions

  • Various market players are investing heavily for constructing new automotive manufacturing plants to enhance the production capacity of cars. For instance, in April 2025, VinFast announced to open a new manufacturing facility in Tamil Nadu, India. This new production plant will be inaugurated to enhance the manufacturing of EVs across India.(Source: Caronphone)

Rising Sales of EVs

  • The sales of EVs have increased rapidly in numerous countries such as India, China, the U.S., Germany and some others due to rising prices of fuel and numerous government initiatives for adopting eco-friendly vehicles. According to the International Energy Agency, around 2.2 million BEVs were sold in Europe during 2024.(Source: International Energy Agency)

Propulsion Insights

How did the Gasoline Segment Led the Car Market in 2025?

The gasoline segment held the highest share of the market. The growing demand for racing cars in the U.S., UK, Italy and some others has boosted the market expansion. Additionally, the rising sales of affordable hatchbacks in India, Thailand, Vietnam and some others is playing a vital role in shaping the industrial landscape. Moreover, numerous advantages of gasoline vehicles including ease of maintenance, affordable initial cost, widespread availability of fuel, strong performance characteristics and some others is expected to propel the growth of the car market.

The electric segment is expected to expand with a notable CAGR during the forecast period. The growing adoption of electric cars in several countries such as Norway, China, the U.S. and some others with an aim at reducing vehicular emission has driven the market expansion. Additionally, numerous benefits and incentives provided by government for adopting EVs is contributing to the industrial growth. Moreover, rapid investment by automotive companies for developing powerful electric vehicles is expected to boost the growth of the car market.

End Use Insights

What Made the Individual to be the Most dominant Segment of the Car Market in 2025?

The individual segment dominated the market. The rising disposable income of the people in developing nations has enabled them to buy cars, thereby driving the market expansion. Additionally, numerous loans provided by financial institutions for purchasing vehicles coupled with growing demand for luxury cars among HNIs is playing a vital role in shaping the industrial landscape. Moreover, rapid investment by automotive brands for developing new passenger cars is expected to drive the growth of the car market.

The commercial segment is expected to rise with a considerable CAGR during the forecast period. The rising adoption of electric cars by ride-sharing companies to earn maximum profits has driven the market growth. Also, the deployment of vans by fleet operators coupled with rapid investment by automotive companies for manufacturing high-performance commercial vehicles is contributing to the market in a positive manner. Moreover, partnerships among automotive giants and EV startups to develop electric vans for commercial purposes is expected to boost the growth of the car market.

Geographical Insights

Car Market Share 2024(%)

Why Asia Pacific Dominated the Car Market in 2025?

Asia Pacific led the car market. The growing production and sales of passenger cars in various nations such as India, China, Japan, South Korea and some others has boosted the market growth. Additionally, rising disposable income of the people coupled with increasing consumer preference to adopt low-interest loans for purchasing cars is playing a crucial role in shaping the industrial landscape. Moreover, the presence of several market players such as BYD, Tata Motors, Hyundai Motors, Toyota Motors and some others is expected to propel the growth of the car market in this region.

  • In March 2025, BYD launched Dolphin in the Chinese territory. Dolphin is an electric hatchback that comes with a 60.5 kWh LFP battery which is expected to deliver a driving range of around 520 kms on full charge.(Source: Car news china)

North America is expected to expand with a significant CAGR during the forecast period. The rising demand for luxury cars in the U.S. and Canada has boosted the market expansion. Also, numerous government initiatives aimed at adopting electric vehicles along with rapid investment by automotive brands for opening up new manufacturing plants is contributing to the industry in a positive direction. Moreover, the presence of numerous market players such as Tesla, Rivian, General Motors, Ford Motors and some others is expected to foster the growth of the car market in this region.

  • In June 2025, General Motors invested around US$ 4 billion. This investment is done for enhancing the production of EVs in the U.S.(Source: GM)

Industry Leader Announcement

  • In April 2025, Oliver Blume, the Chairman of the Board of Management of Volkswagen AG made an announcement stating that, " China is an important market for the Volkswagen Group. Two years ago, we realigned our strategy. And we have made progress faster than initially planned. Our products are tailored to the needs of Chinese customers: with a clear design language and cutting-edge technologies. The Shanghai Auto Show is another milestone on our strategic path: we want to be the global tech driver for the automotive industry by 2035."

Competitive Landscape

The car market is a highly fragmented industry with the presence of several dominating players. Some of the prominent companies in this industry consists of Tata Motors, Tesla, BMW, Ford Motor, General Motors, Honda Motor, Hyundai Motor, Suzuki Motor, Toyota Motor, Volkswagen and some others. These companies are constantly engaged in developing advanced cars and adopting numerous strategies such as partnerships, joint ventures, launches, collaborations, business expansions, acquisitions, and some others to maintain their dominance in this industry.

  • In July 2025, BMW announced to launch all-new BMW 2 Series Gran Coupe in India. This car can be booked via BMW online store.(Source: Indianautosblog)
  • In July 2025, Tesla launched the model Y in India. This new autonomous vehicle is designed for the elite-class consumers of this nation.(Source: Tesla)
  • According to the annual report of Ford, the revenue of car sales in 2023 was around US$ 165901 million that increased to US$ 172706 million in 2024.(Source: Cloudfront)

Recent Developments

  • In July 2025, Kia launched Clavis EV in India. This electric car is equipped with a 51.4kWh battery pack that is expected to deliver a driving range of around 490 kms on a single charge.(Source: Carwale)
  • In May 2025, BYD announced to launch Dolphin Surf EV in Europe. This car is designed for the urban dwellers of the European region.(Source: Reuters)

Ford Car Sales Revenue in USD Million (2023-24)

  • In March 2025, Toyota announced to launch C-HR+ EV in the U.S by 2026. This new EV will come with a 57.7 kWh battery pack and a single electric motor that is claimed to provide a driving range of around 455 kms on full charge.(Source: Carscoops)

Car Market Key Players

Car Market Top Key Players

Car Market Segments

By Vehicle

  • Hatchback
  • Sedan
  • SUV
  • Sports Car
  • Others

By Propulsion

  • Gasoline
  • Diesel
  • Electric
  • FCEV

By End-Use

  • Commercial
  • Ridesharing and taxi services
  • Rental car services
  • Corporate fleet
  • Individual

By Sales Channel

  • Peer-to-peer
  • Franchised dealer
  • Independent dealer

By Region

  • North America
  • Latin America
  • Western Europe
  • Eastern Europe
  • Asia Pacific
  • The Middle East and Africa
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  • Insight Code: 1251
  • No. of Pages: 150+
  • Format: PDF/PPT/Excel
  • Last Updated: 17 July 2025
  • Report Covered: [Revenue + Volume]
  • Historical Year: 2021-2023
  • Base Year: 2024
  • Estimated Years: 2025-2034

Meet the Team

Shubham Madhukar Desale is a passionate and insights-driven Research Analyst with over five years of experience in market research, including more than four years of specialized expertise in the global automotive industry.

Learn more about Shubham Desale

Aditi Shivarkar, with 14+ years of experience in automotive market research, specializes in tracking trends across vehicle technologies, mobility solutions, and materials innovation. She delivers accurate, actionable insights that drive excellence in the automotive sector—fueling strategies around electrification, sustainability, and advanced manufacturing.

Learn more about Aditi Shivarkar
FAQ's

The global car market is expected to grow from USD 1.61 trillion in 2025 to USD 4.16 trillion by 2034, registering a CAGR of 11.15%. This surge is driven by rising demand for luxury and electric vehicles, especially in developed regions, alongside technological innovations and government support for cleaner mobility.

Asia Pacific currently leads the global market due to high production and sales in China, India, and Japan. North America is projected to witness substantial growth owing to increasing demand for premium cars and EV adoption backed by investments from Tesla, GM, and others.

Major growth drivers include the surge in electric vehicle (EV) adoption, rising disposable incomes, and strategic investments in manufacturing and R&D. Additionally, increasing government regulations to curb emissions are pushing automakers to innovate toward sustainable mobility solutions.

Key disruptions include autonomous driving systems (L2–L5), EV battery innovations, and connected car technologies. Companies like Tesla, Toyota, and Volkswagen are focusing on next-gen vehicle platforms and AI integration to enhance user experience and safety.

Automakers are increasingly partnering with rental firms, EV startups, and battery tech providers to accelerate EV adoption and optimize cost-efficiency. For instance, BYD partnered with Car Inc. in China to deploy electric rental fleets, reflecting a shift towards shared, sustainable mobility.

While gasoline-powered vehicles still dominate, electric vehicles are rapidly gaining market share due to environmental benefits and government incentives. Notably, countries like Norway, China, and the U.S. are seeing a steep rise in EV adoption.

Stringent emission norms, EV subsidies, and low-interest financing for green vehicles are shaping purchasing patterns globally. These policies are not only accelerating EV penetration but also forcing traditional automakers to pivot towards electric and hybrid platforms.

Leading automakers include Tesla, Toyota, Volkswagen, Ford, BMW, Tata Motors, and Hyundai. These companies are driving innovation through electrification, product launches, and global expansions to meet rising consumer and fleet demand.

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