BAKU, Azerbaijan, June 7. Global investment in the transport sector has more than doubled over the past decade and is set to surpass $330 billion in 2025, driven largely by electrification efforts, according to the International Energy Agency (IEA), Trend reports.
Electric vehicles (EVs) are the key growth driver, accounting for nearly $175 billion of the total investment. Rail electrification follows with close to $35 billion. Overall, electrification represents around 60% of global transport investment, with notable regional differences. China and Europe dedicate almost all their transport spending to electrification, while North America directs over 75% of its transport investment toward this goal.
Beyond electrification, energy efficiency improvements such as more fuel-efficient vehicles in both road and rail sectors also play a significant role, replacing older, less efficient models with advanced alternatives that reduce energy consumption without sacrificing performance.
Trade dynamics are shaping investment flows as well. Rising trade barriers and tariff increases could prompt companies to strategically relocate investments to maintain competitiveness. Chinese automakers, for instance, have expanded their global manufacturing presence, announcing roughly $80 billion in EV-related foreign direct investment over the past five years. Nearly half of this investment is in Europe, while recent focus has shifted to Asia and Latin America, with companies like BYD and SAIC Motor setting up production facilities in countries including Thailand, Indonesia, Uzbekistan, Mexico, and Türkiye.
Battery manufacturing capacity is also expanding rapidly, predominantly led by Chinese firms.
However, trade tensions could lead to higher vehicle prices and weaker demand, as automotive supply chains are highly globalized, with design, components, and assembly spread across different countries. These disruptions risk wider impacts on global GDP and inflation.
Meanwhile, shipping, which accounts for a small share of transport investment, is poised for increased spending following the International Maritime Organization’s (IMO) adoption of draft rules aimed at achieving net zero emissions by 2050. These rules, set for final adoption in October 2025 and implementation from 2027, include global fuel standards, emissions pricing, and support for zero-emission technologies.
