Energy technology manufacturing rebalances amid shifting trade and industrial policies

The global market for key energy technologies surpassed USD 1.1 trillion in 2025, sustaining average annual growth of around 20% over the past decade, according to a commentary published by the International Energy Agency (IEA). The technologies include solar PV, wind, batteries, electric vehicles, heat pumps, and electrolysers. Between 2023 and 2025, solar PV module prices fell by around 50% and battery pack prices by around 30%. Under current policies, the market value is projected to reach around USD 1.9 trillion by 2035. If governments’ stated policy intentions are factored in, that figure could exceed USD 2.6 trillion.

Cross-border trade has enabled the rapid scaling of these technologies, even as trade measures have grown more restrictive. Tariffs, duties, anti-dumping actions, local-content rules, and subsidy regimes have proliferated. In 2024, the announced trade-weighted global average tariff and duty rate across the solar PV supply chain increased nine-fold relative to the previous year, reaching around 36%. Despite this, international trade in relevant products climbed to record levels in Q2 2025. Electric cars are expected to account for around three-quarters of total market value by the mid-2030s.

Investment in plants manufacturing these technologies reached nearly USD 220 billion in 2023 before easing to under USD 200 billion in 2025. Batteries and electric vehicles accounted for more than three-quarters of manufacturing investment in 2024. Investment in solar PV manufacturing more than halved amid surplus capacity and price competition, especially in China. Wind manufacturing investment fell as supply chain disruptions squeezed margins, particularly in Europe. China continues to attract most global manufacturing investment, accounting for around 70% of cumulative spending since 2020.

China’s gross exports across these key energy technology categories reached more than USD 160 billion in 2025, an 11% increase over the previous year. The country accounts for over 35% of global gross exports, or approximately 50% when excluding intra-EU trade. Over the past decade, its solar PV output has increased thirteen-fold to almost half a terawatt per year. Investment in the European Union nearly doubled between 2023 and 2024, spurred by industrial policies like the Net Zero Industry Act and Clean Industrial Deal. Korea recorded a 25% increase in battery and EV manufacturing investment, while India’s clean energy investment rose by more than 65%.

The IEA notes that governments face growing security concerns and trade-offs as deployment accelerates. Strategies that balance openness to trade with targeted mitigation of specific security risks, maximizing the benefits that can be obtained from partnerships and innovation, are likely to be most effective. Under stated policies, the European Union’s fossil fuel imports fall from 55% of total energy consumption in 2024 to 40% in 2035. In the same scenario, China’s net exports of energy technologies more than double, reaching around USD 375 billion by 2035. A forthcoming ETP Special Report on energy technology supply chains in Southeast Asia will support policy makers in the region when designing their industrial strategies.