European Car Sales Rise for Third Straight Year in 2025, EVs Lead but Hybrids Grow Faster

New car registrations in Europe reached 13.3 million units in 2025, up 2.4% year-on-year, marking the third consecutive year of growth. Electric vehicles (EVs) were the primary driver: battery-electric vehicle (BEV) registrations surged by 30%, accounting for approximately 20% of the total market. Affordable models priced around €20,000—such as the Citroën ë-C3 and Chinese brands like BYD—effectively stimulated demand. However, due to insufficient charging infrastructure, plug-in hybrid electric vehicle (PHEV) sales grew by 33%, making them the fastest-growing segment. Volkswagen and Porsche have already adjusted their electrification strategies, ramping up investments in hybrid models. Although December sales jumped 7.6% year-on-year, overall registrations remained 15% below pre-pandemic levels. Germany introduced a €3 billion EV subsidy scheme covering all brands, significantly boosting sales of Chinese automakers like BYD, whose European registrations soared by more than threefold, closing in on Tesla. Meanwhile, Tesla’s registrations in Europe plummeted by 27%. The EU is considering relaxing its planned 2035 ban on new internal combustion engine vehicles, though the proposal still awaits formal approval. Analysts expect the European automotive market to continue its recovery in 2025, with Chinese brands likely to further expand their market share.