EU car sales rise 1.8% in 2025 as EVs gain share; Tesla suffers sharp drop

New car sales in the European Union rose modestly last year, driven by growing demand for electric vehicles, though overall volumes remain well below levels seen before the pandemic, industry data showed.

According to the European Automobile Manufacturers’ Association (ACEA), EU car registrations increased by 1.8% in 2025 to 10.8 million vehicles.

Sales picked up pace at the end of the year, rising 5.8% in December to 963,319 units, as electric and hybrid models continued to attract buyers.

Despite the improvement, the industry body cautioned that the recovery remains fragile, with sales still lagging historical norms amid high prices, tighter household budgets, and lingering supply chain challenges.

Electric cars take a larger slice of the market

Battery-electric vehicles accounted for a growing share of the EU market, with nearly 1.9 million registrations in 2025.

That represented 17.4% of total sales, up from 13.6% a year earlier.

Hybrid electric cars remained the most popular option, capturing 34.5% of the market.

By contrast, the combined share of petrol and diesel vehicles fell sharply to 35.5%, down from 45.2% the previous year.

Petrol car sales declined by 18.7% overall, with the steepest falls recorded in France, where registrations dropped 32%, followed by Germany, Italy and Spain.

Growth in electric vehicle sales was strongest in the bloc’s largest markets.

Germany posted a 43.2% rise, while the Netherlands, Belgium and France also recorded double-digit increases.

Together, these four countries accounted for nearly two-thirds of all battery-electric car sales in the EU.

Tesla loses ground as BYD surges

The shift toward electric vehicles has reshaped competition among manufacturers, with Tesla suffering a sharp decline in Europe.

The US carmaker’s sales fell 31.9% in December to 21,485 vehicles, cutting its market share to 2.2%.

Over the full year, Tesla sales dropped 37.9% to 150,504 units.

Tesla lost ground to China’s BYD, whose European sales nearly tripled in December to 18,008 vehicles.

BYD more than tripled its annual sales to 128,827 cars, lifting its market share to 1.9%.

BYD overtook Tesla as the world’s largest electric carmaker in 2025, benefiting from aggressive pricing and a broad product lineup.

Tesla has also faced challenges following the rollback of US electric vehicle subsidies and emissions incentives, as well as consumer backlash linked to Elon Musk’s political positions.

Mixed fortunes across Europe’s wider car market; JLR sells one Jaguar in Dec

Across Europe as a whole, including the EU, the European Free Trade Association and the UK, car sales rose 7.6% in December to 1.2 million vehicles and increased 2.4% over the year to 13.3 million, the ACEA said.

Jaguar Land Rover continued to struggle after a cyber attack in September that forced factory shutdowns.

December sales fell 25.3% to 4,332 vehicles, while full-year sales declined 17% to 53,161 units.

The company sold just one Jaguar in December as it ended production of internal combustion engine models, marking its transition to an all-electric future.