EU car market stalls slightly in 2025, but EVs continue strong gains

New car registrations across the European Union slipped by 0.6% in the first five months of 2025 compared to the same period last year, according to the latest data from the European Automobile Manufacturers’ Association (ACEA).

Despite the slight year-to-date (YTD) dip, registrations in May alone rose by 1.6% year-on-year (YOY), offering a modest rebound for the continent’s automotive sector.

The overall decline masks a significant shift in consumer preferences, with electric and hybrid vehicles continuing to grow their footprint. Battery-electric cars (BEVs) captured a 15.4% share of the EU market by the end of May, up from 12.1% in the same period last year. While still short of long-term climate targets, the increase signals continued momentum in the region’s electrification efforts.

Electric surge in key markets

Battery-electric vehicle registrations hit 701,089 units between January and May, bolstered by substantial gains in key markets. Germany led the charge with a staggering 43.2% jump in BEV registrations, followed by Belgium (+26.7%) and the Netherlands (+6.7%). France was the only major market to register a decline, falling 7.1% over the same period.

Hybrid-electric cars remained the top choice among EU buyers, with 1,601,090 units registered YTD, accounting for 35.1% of the total market. The segment posted robust growth across all four of the EU’s largest auto markets: France (+38.3%), Spain (+34.9%), Italy (+13.8%), and Germany (+12.1%).

Plug-in hybrid electric vehicles (PHEVs) also enjoyed a third consecutive month of growth, with registrations rising by 46.9% YOY in May. Germany (+52.8%) and Spain (+66.6%) drove the surge, lifting the PHEV market share to 8.2%, up from 7.1% a year ago.

Combustion engine decline deepens

Conventional internal combustion engine vehicles saw steep declines in both petrol and diesel segments. Petrol car registrations dropped 20.2% to 1,305,525 units, reducing their market share to 28.6% from 35.6% a year earlier. France experienced the largest slump in petrol sales, falling by 34.3%, with Germany, Italy, and Spain also reporting double-digit declines.

Diesel’s fall was even sharper, with registrations plunging 26.6% and market share shrinking to just 9.5%. The YOY figures for May alone were grim: petrol down 18.6%, diesel down 27.6%.

The latest figures confirm that while the overall EU auto market remains relatively stagnant, consumer appetite for electrified vehicles, particularly hybrids and BEVs, is accelerating. The shift away from fossil-fuel-powered cars is becoming more pronounced, though battery-electric adoption still lags behind the EU’s Green Deal ambitions.