The European car market continues to undergo significant transformation, marked by increasing electrification and changing consumer preferences. The latest new car sales figures for the first five months of the year show mixed signals: while electric and hybrid vehicles continue to gain market share, overall market growth remains anemic, and in some cases even declines.
The growing role of electric and hybrid vehicles:
The most obvious trend is the continued rise in the popularity of alternative-powered vehicles. For the period January-May 2025, sales of fully electric vehicles (BEVs) in the European Union are growing, but still reaching a modest 15.4% market share of total new car registrations. Hybrid electric vehicles (HEVs) continue to be the preferred choice, accounting for 35.1% of the market. Plug-in hybrid electric vehicles (PHEVs) are showing strong growth, with a 46.9% increase in May 2025, but their share is again very low, reaching only 8.2% market share. This clearly shows a shift in consumers towards more environmentally friendly options.
Challenges for traditional engines:
The market share of cars with gasoline and diesel engines continues to decline, but remains the highest. Their combined share for the first five months of 2025 fell to 38.1%, compared to 48.5% for the same period of the previous year. This decline is particularly pronounced for diesel cars, whose registrations fell by 27.6% year-on-year in May, reaching only 9.5% market share.
Overall market growth and regional differences:
Overall, the total European new car market recorded modest growth of 2.5% in May 2025 year-on-year. However, for the period January-May 2025, new car registrations in the EU fell by only 0.6% compared to the same period last year. This shows that the dynamics in the different segments are fully compensating for the overall market challenges, including economic factors and changing regulations. However, major markets such as Germany and France continue to struggle. These trends reflect the complex transition that the European automotive industry is going through, balancing innovation, market demand and strict environmental targets.