August brought a breath of fresh air to the European new car market. For the second consecutive month, registrations in the European Union recorded growth, with a strong boost coming from electric vehicles (BEVs). However, are these partial successes enough to reverse the negative trend since the beginning of the year? The automotive industry is divided, and the data shows a complex picture.
Short-term upturn, long-term decline
A total of 677,785 new cars were delivered to the EU in August, representing a 5.3% increase year-on-year. This result was supported by solid growth in key markets: Spain continued its impressive upward trajectory with a 17.2% increase for the month. Germany reported a strong 5% jump. France returned to growth with 2.2%, supported by government incentives for electric vehicles.
However, the entire period from January to August 2025 remained negative. Total new car registrations in the EU decreased by 0.1% compared to 2024, meaning 10,421 fewer units sold. Markets such as France (-7.1% YTD) and Italy (-3.7%) are still struggling to break out of the slump.
Electric Vehicles: Record Shares, Low Volumes
Electric vehicles (BEVs) are the clear hero of the month, registering a 30.2% growth in August and reaching a market share of 17.8% - the highest of the year. However, there is a catch to this achievement: it was achieved with the fourth lowest absolute sales volume for 2025 on an annual basis. However, countries with working incentives, such as Spain (BEV growth of an impressive 160.8% in August, thanks to the MOVES III program), show the right direction.
Smaller markets such as Poland (+237.7%) and Bulgaria (+124.1%) also saw impressive growth, and in the case of Bulgaria, without any support from new subsidies and tax breaks. However, the domestic market started from an extremely low base, which makes the percentage jumps deceptive in relation to the total European volume.
The paradox of plug-in hybrids and the power of conventional hybrids
Plug-in hybrids (PHEVs) also enjoyed a strong month (+54.5%), reaching a record market share for the year of 10.4%. Here again, however, France is the only one of the four largest markets to report a decline in PHEV demand (-5%), signaling uncertainty among consumers about this type of powertrain.
The real “winning compromise“ remains the hybrid car (including full and mild hybrids). They were the most popular choice in the EU in August with a 33.9% market share. Hybrids are the driving force behind the total "electrified" segment (BEV + PHEV + Hybrids), which now accounts for 59.3% of all new deliveries.
ICE: Not giving up easily
Despite the constant pressure, the combined share of petrol and diesel cars (ICE) continues to decline, with a decline of 16.6% in August. But here's the important fact: despite all the regulations and incentives, ICE still held a 37.5% market share for the first eight months of the year.
This is 12.9 percentage points more than the combined share of all Plug-in vehicles (BEV + PHEV). This fact is a cause for serious concern among regulators. The Association of European Automobile Manufacturers (ACEA) explicitly states that the pace of penetration of electric vehicles "is still below what is needed at this stage of the transition".
The conclusion is clear: while the August figures are encouraging, the market is still far from the acceleration needed to meet the EU’s ambitious targets. To turn the tide in a lasting way, European manufacturers and governments will need much more than two consecutive strong months.
But there’s something else!
A key part of this dominance of hybrids, especially in continental Europe, is due to so-called "mild hybrids" (MHEVs). These systems, although classified as hybrids, are actually vehicles with an internal combustion engine (ICE) to which a small electric motor (usually a 48-volt starter-generator) has been added.
This microscopic electric boost is not enough for autonomous driving, but it is quite enough to officially meet stricter environmental standards and slightly reduce fuel consumption on paper. Manufacturers are increasingly converting their traditional ICE models into mild hybrids, as this is the easiest and most cost-effective way to avoid high EU emissions fines without scaring the mass consumer with more expensive and complex all-electric or plug-in hybrid technologies. In practice, the demand for such models reflects the customer preference for the familiar ICE, disguised under the label "hybrid".