The European automotive landscape is undergoing a significant transformation, marked by the accelerating adoption of battery-electric vehicles (BEVs) despite hybrid models retaining their position as the dominant powertrain choice for consumers. This shift, detailed by the European Automobile Manufacturers’ Association (ACEA), indicates a broader trend towards electrification, challenging traditional internal combustion engine (ICE) vehicles.
While overall new car registrations across the European Union saw a marginal decrease of 0.1% in the first eight months of 2025 compared to the prior year, August alone demonstrated a healthy uptick of 5.3%. Crucially, sales of BEVs experienced robust year-on-year growth of 24.8% during the January-August period. This surge has elevated the BEV market share to 15.8%, a notable increase from 12.6% in the same period last year. Concurrently, hybrid-electric vehicle sales saw a 16.4% expansion, underscoring their continued appeal.
Conversely, the market for new petrol and diesel cars has contracted significantly, with registrations plummeting by 19.7% and 25.7% respectively over the first eight months of the year. This sharp decline in ICE vehicle sales points to a decisive pivot by consumers and manufacturers towards greener alternatives.
The adoption of BEVs is not uniform across all major European economies. Germany, for instance, reported a substantial 39.2% increase in EV sales during the January-August period. Italy followed with a 28.9% growth, and Spain nearly doubled its EV sales. France, despite a slight overall decline of 2% in EV sales for the period, experienced a significant rebound in August with a 29.3% surge in new registrations.
In terms of manufacturer performance, Volkswagen Group maintained its leadership in the EU new car market for the first eight months of 2025, capturing 27.5% of sales with a 4.1% year-on-year increase. Within the group, Skoda and Cupra brands showed particularly strong growth, increasing sales by 10% and 39.1%, respectively, although Audi, Porsche, and Seat experienced sales declines. The Renault Group also saw its sales rise by 5.8%, with all its brands contributing to this growth. Toyota and Stellantis, which collectively hold nearly a quarter of the market, observed a dip in sales, while BMW and Mercedes-Benz reported increased figures.
Meanwhile, Tesla’s market share has contracted, with sales falling by over 42%, reducing its share to 1.2% from 2.1% last year. This presents an opportunity for emerging players, as Chinese manufacturers continue to gain traction. BYD, in particular, recorded an impressive sales increase of over 244% year-on-year, and SEIC Motors saw its sales grow by 33.1%, signaling intensified competition from the East.
Michael Carter holds a BA in Economics from the University of Chicago and is a CFA charterholder. With over a decade of experience at top financial publications, he specializes in equity markets, mergers & acquisitions, and macroeconomic trends, delivering clear, data-driven insights that help readers navigate complex market movements.