European car sales grew for a third year in a row in 2025, as consumers snapped up more affordable electric and hybrid models.
New-vehicle registrations climbed 2.4% to 13.3 million units after another bounce in December, the European Automobile Manufacturers’ Association said Tuesday. While that’s good news for an industry battered by tariffs and rising competition, sales still are around 15% below pre-pandemic levels.
Last year’s gain was fuelled in part by a recovery in EV sales as more models priced around €20,000 (US$23,766, or RM93,978) became available. They include Stellantis NV’s Citroën ë-C3 city car, as well as China-made imports from the likes of BYD Co. Registrations of fully electric vehicles surged 30%, with the drivetrain type accounting for roughly a fifth of the overall market.
That’s still somewhat below expectations, though, with drivers often opting for cars that have both a battery and a combustion engine to make up for the region’s spotty charging infrastructure. Volkswagen and Porsche AG have walked back their electrification strategies to account for the slower growth trajectory, with both planning more hybrid models. Sales of plug-in hybrids rose 33% last year, making it the region’s fastest-growing drivetrain.
Consumers held back during the early part of 2025, when President Donald Trump’s tariffs roiled markets, spreading economic uncertainty. They returned in the second half, when registrations consistently rose. In December, European car sales grew 7.6% — the sixth consecutive month of gains — with strong momentum in Germany and the Netherlands offsetting weaknesses in France and Spain.
While manufacturers churn out new electric models, some are still looking for help from policymakers on preserving the market for gasoline-powered vehicles. The European Commission proposed easing requirements that would have effectilvey halted sales of new gasoline and diesel-fuelled cars starting in 2035. The plans still need to pass several hurdles before new targets on CO2 fleet reductions are finalised.
Sales are set for a boost in Germany, where the government this month unveiled a €3 billion EV subsidy programme. The aid will be open to all manufacturers, including Chinese brands that made significant inroads in the region last year. BYD’s sales more than tripled, with the manufacturer closing in on Tesla Inc, whose European registrations slumped 27% in 2025.
European car sales may rise again this year due to the new subsidies and several next-generation models arriving, according to Bloomberg Intelligence analyst Gillian Davis.
Chinese brands “will likely grow market share, notably in the UK,” Davis said in a note.
Source: theedgemalaysia