European Car Sales Surge 5.9% in July, Led by EV and Hybrid Models

European new-car market rose 5.9% in July, the largest gain in 15 months, driven by a 52% jump in plug-in hybrid sales and a 33% increase in fully electric vehicle sales. Hybrid-electric models accounted for the largest share of new registrations. The growth comes as the EU continues to push for lower tariffs with the US and as European automakers face challenges from Chinese brands and the electric transition.

The European new-car market experienced a significant resurgence in July, rising by 5.9% compared to the same period last year, according to data from the European Automobile Manufacturers Association (ACEA). This represents the largest gain in 15 months, driven primarily by a 52% increase in plug-in hybrid (PHEV) sales and a 33% rise in fully electric vehicle (BEV) sales [1].

The growth in electric vehicle (EV) registrations was particularly notable, with BEVs accounting for 17% of all new registrations in July 2025, up from 18% in June. This trend is part of a broader shift towards sustainable transportation, as the European Union continues to push for lower tariffs with the United States and European automakers face increasing competition from Chinese brands [2].

Despite the overall market growth, Tesla (TSLA.O) continued to lose market share for the seventh consecutive month. Tesla's sales dropped by 40.2% year-on-year, while BYD (002594.SZ), a Chinese automaker, saw its sales jump by 225.3%, giving it a 1.2% market share. This indicates a growing presence of Chinese competitors in the European market [1].

Volkswagen (VOWG.DE) and Renault (RENA.PA) also saw significant increases in their sales, with a 11.6% and 8.8% year-on-year growth, respectively. However, Stellantis (STLAM.MI) experienced a 1.1% decline in sales. The overall market saw a 7.4% increase in total car sales, with registrations of battery electric, hybrid electric, and plug-in hybrid cars collectively accounting for 59.8% of the bloc's registrations [1].

The growth in electric vehicle registrations is also reflected in the country-specific data. Germany, the largest European market, saw a 38% increase in BEV registrations in the first seven months of 2025 compared to the same period in 2024. Meanwhile, France maintained a stable BEV share of about 17%, supported by the social leasing scheme active in early 2024 [2].

The European market's growth is a positive sign for automakers and investors alike, indicating a robust demand for electric and hybrid vehicles. However, the continued competition from Chinese brands and the regulatory push towards lower CO2 emissions pose challenges for traditional automakers. The market's resilience and the increasing adoption of electric vehicles signal a promising future for the European automotive industry.

References:
[1] https://www.reuters.com/business/autos-transportation/european-car-sales-resume-rise-july-byd-firmly-ahead-tesla-2025-08-28/
[2] https://theicct.org/publication/european-market-monitor-cars-and-vans-july-2025/