New data: EVs grew more in ’25 than ’24, despite constant lies saying otherwise

Global electric vehicle sales reached a record 20.7 million in 2025, up 3.6 million units (+20%) year-over-year, with China at 12.9 million (+17%), Europe 4.3 million (+33%) and Rest of World 1.7 million (+48%); North America was the outlier with a 4% decline to 1.8 million. The report shows accelerating unit growth (2025's +3.6m > 2024's +3.5m), while internal-combustion vehicle sales are roughly 25% below their 2017 peak, underscoring a structural shift and policy-driven volatility (e.g., incentive expirations in the US and Germany). Implications favor EV-focused OEMs, battery and supply-chain players—particularly Chinese manufacturers expanding production and exports—while Western automakers that have scaled back EV plans risk underexposure to a continuing secular trend.

Analysis

Market structure: 20.7M global EVs in 2025 (+20%, +3.6M units) concentrates winners in Chinese OEMs and battery-material suppliers while disrupting legacy OEMs in North America/Europe (NA -4%). Expect pricing power to shift to vertically integrated EV players (BYD, CATL partners) and to critical materials (lithium, copper, nickel) where demand growth of +15–25% year-over-year for cell metals is likely over the next 12–24 months. Cross-asset: higher commodity demand should push copper and lithium prices up, tighten spreads on high-yield auto debt for weak incumbents, and support CNY via export strength; implied vol for EV equities will remain elevated around policy cliffs.

Risk assessment: Key tail risks include abrupt policy reversals (US/Europe incentives cut within 0–6 months), Chinese export restrictions on battery materials, or a rapid oversupply of cells if Western OEMs restart capacity — each can swing prices ±20–50% in affected names. Short-term (days–months) volatility will be driven by incentive timing and quarterly deliveries; long-term (3–5 years) fundamentals favor EV adoption and material deficits unless battery recycling scales >50% by 2030. Hidden dependency: automotive electrification pace now hinges more on battery supply curves than vehicle demand.

Trade implications: Direct longs: TSLA (TSLA), BYD (BYDDF/1211.HK), ALB (lithium), FCX (copper) with 6–18 month horizons; shorts: Ford (F), GM (GM), selected Tier-1 ICE suppliers where margins compress. Pair trades: long BYD vs short F (equal notional) to express shift to Chinese cost advantage. Options: buy 6–12 month 10% OTM call spreads on TSLA/BYD to cap premium; buy puts on GM/F 3–6 month to hedge policy risk. Rotate into renewable inverters/charging (ENPH, SEDG, CHPT) as ancillary beneficiaries.

Contrarian angles: Consensus downplays persistent unit growth acceleration (unit increase rose from +3.2M to +3.6M over two years) and over-weights temporary incentive cliffs. Mispricing: legacy OEM equities still price steady ICE cashflows; a disciplined reallocation into battery raw materials and Chinese OEMs is under-owned. Historical parallel: smartphone incumbents that delayed (Nokia) lost share rapidly — same risk for automakers delaying EV spend. Unintended consequence: rapid policy-driven demand spikes create boom-bust cycles in materials and EV dealer inventory — tradeable volatility events ahead.

Key Decisions for Investors

• Establish a 2–3% long position in TSLA (ticker TSLA) and a 2–3% long in BYD (BYDDF/1211.HK) across 6–18 months to capture unit growth and margin leverage; hedge 30% of position with 12-month 10% OTM put buys in case of policy cliff.
• Allocate 1.5–2% to battery-material names: ALB (Albemarle) and SQM, plus 2% to copper exposure via FCX (Freeport) or COPX ETF, horizon 12–24 months; trim if lithium prices drop >25% from current levels.
• Reduce direct exposure to legacy OEMs: cut Ford (F) and GM (GM) positions by 50% vs benchmark and consider a 1–2% short/put position on GM (3–6 month puts) to reflect ICE demand erosion tied to policy uncertainty.
• Execute a pair trade: long BYD (equal notional) vs short Ford (F) sized to 1–2% net exposure, rebalancing monthly; close the pair if BYD/TSLA outperform Ford/GM by >15% absolute in 90 days.
• Buy 6–9 month call spreads (10%–25% OTM) on ENPH or SEDG (0.5–1% exposure) to play charging/solar tailwinds; monitor US federal/state incentive announcements over next 60–90 days and reduce delta if incentives are removed.