European car market falls 4% in January despite growth in EVs

Europe’s new passenger car market declined in January 2026 despite continued growth in electric vehicles, according to new data from JATO Dynamics.

A total of 953,290 vehicles were registered across Europe’s 28 markets during the month, representing a 4.0% year-on-year fall.

The downturn was driven by weaker demand in some of the region’s largest markets. Registrations in Germany and France both declined by 6.6%, while Spain saw a drop of 3.1%. In contrast, Italy and the UK recorded growth, with registrations rising by 6.3% and 3.4% respectively.

Despite the overall decline, electrified powertrains continued to gain market share. Battery-electric vehicle (BEV) registrations rose 13% year-on-year and accounted for 20% of the market.

Plug-in hybrid vehicles (PHEVs) recorded the strongest growth among powertrains, with registrations increasing by 32% from 75,242 to 99,303 units, representing 10% of the market. The increase was driven in part by new plug-in models from Volkswagen Group, including the Golf, Tayron, A5 and A3, as well as strong demand for BYD’s Seal U and the Jaecoo 7.

Mild hybrid electric vehicles (MHEVs) captured 26% of the market, placing them just three percentage points behind internal combustion engine (ICE) vehicles, which continue to decline. Full hybrid electric vehicles (HEVs) held a 14% market share, up 4% year-on-year.

“As demand for ICE vehicles declines, MHEVs are increasingly emerging as a natural substitute. Consumers are also becoming more willing to explore alternative powertrains and move away from traditional ICE vehicles, supported by the strong growth of both BEVs and PHEVs,” he said.

At group level, Stellantis was among the few major manufacturers to record growth, with registrations rising 7.4% year-on-year. The increase was largely driven by Fiat, whose registrations surged by 24.7%, helped by the launch of the new Grande Panda.

Volkswagen Group saw registrations fall by 4.4%, although Skoda recorded growth of 9.8%. Renault brand registrations increased by 4.6%, but overall Renault Group registrations declined by 14.8%, partly due to weaker demand for the Dacia Duster and Sandero.

Chinese manufacturers also showed mixed results. Established brands such as Geely Group and MG saw sales decline by 7.3% and 5.3% respectively. However, newer entrants posted strong growth, with BYD registering 8,977 BEVs, up 86% year-on-year, while Leapmotor recorded 3,833 BEV registrations, a 357% increase compared with January 2025.

BYD was the most-registered Chinese carmaker in the European market during the month.