Macquarie said in a note that 2017 was "the year electric cars came of age", with monthly market share over 2% by the end of the year.
Its analysis of official sales data from China, the US, Europe, Japan and Canada showed these countries accounted for 1.7% of new car sales, up from 1.1% in 2016.
"Total car sales of all engine-types in these markets grew by 1.6% year-on-year to 66.5 million, so the market share growth was enough to see sales of EVs rise to 1.1 million vehicles, from 740,000 in 2017, up 51%," Macquarie said.
It noted that this growth was above its forecast of around 40%.
Out of the total, battery-electric vehicles (BEVs) grew at 61% to 734,000 vehicles and plug-in hybrids (PHEVs) gained 36% to 386,000.
The EV market share in China was 2.3% compared with 1.4% in 2016, while in the rest of the world, it was 1.4%, up from 2016's 1.1%.
However, Macquarie said these figures might not show the whole picture due to data issues related to China's revisions of year-to-date data.
In China, sales of BEVs and PHEVs rose 72% on the year to 579,000, while sales outside the country climbed 34% to 54,000.
China also has a large commercial EV market, with 198,000 sold in the country in 2017, up 16%, of which 184,000 were BEVs and 14,000 were PHEVs.
The banks said it did not track commercial EV sales anywhere else as they are believed to be small, with the market share in Europe only at 0.5%.
Looking to 2018, Macquarie noted that if sales were to grow by around 50% again, volumes would increase to 1.8 million and market share to 2.4% of the main markets, or around 2.1% of the entire global market.
"We think it will slightly undershoot this," it said.
"We continue to see global EV sales expanding in 2018, though at a somewhat less breakneck pace of 30-40%. Our forecasts are little changed … with 2018 a less impressive year than 2017 in terms of growth, though still pushing market share (across all markets) up to nearly 2%, from 1.4% this year, and heading over 5% by 2022. The risks in the medium-term seem firmly to the upside."
The bank said volumes would depend on what happened in China — how much growth slows —and what happened with the Tesla Model 3.
"The bearish case on Chinese EV sales this year is that subsidies are being reduced. While the government is maintaining EVs' purchase tax exemption, the sales subsidy is likely to be cut in line with this report because central government subsidies are due to be cut in 2018," Macquarie said.
Macquarie China auto analyst Janet Lewis said in a separate report that she thinks sales will rise by less than 10% due to an incentive for carmakers to push back sales into 2019 to be eligible for the New Energy Vehicle credit system, some front-loading of demand in 2018 and the difficulty in sales growth spreading from early adopters to the mass market.
However, Macquarie noted that there were some optimistic factors to consider such as market momentum, government backing and higher sales expectations from the China Association of Automobile Manufacturers.
"For now, we will assume sales growth is 25%," the bank said.
Looking at the US, it noted that market continued to be dominated by Tesla, with the new Tesla Model 3 said to have over 400,000 pre-orders, which are in production but behind schedule.
"Nevertheless we note that if Tesla only make and sell 100,000 in the US in 2018 that would still imply a near doubling of US BEV sales. Furthermore some customers who are disappointed might shift to another brand. We therefore see this as one of the key upside markets next year," said Macquarie.