The European car market is undergoing a notable transformation, as recent data from Jato Dynamics reveals shifts in battery electric vehicle (BEV) sales and production origins. As of February 5, 2025, the market has recorded modest growth, with Volkswagen surpassing Tesla as the leading brand in BEV sales. This change reflects broader trends in consumer preferences and the competitive landscape of the automotive industry.
In 2025, Europe’s overall vehicle market grew by 2.3%, with 13.2 million vehicles registered. However, this figure still lags behind pre-pandemic levels, showing a 16.5% decline compared to the 15.8 million units registered in 2019. This data encompasses registrations from 28 European markets and aligns with earlier reports from the European Automobile Manufacturers’ Association, which indicated a 1.7% growth in EU markets.
Geographic Spread of Growth
The growth in vehicle registrations varied significantly across different countries. Norway led the charge with a remarkable 39% increase, followed by Spain at 13%, Austria at 12%, and Poland at 8%. In contrast, several countries experienced declines, with Belgium down 7%, France down 5%, and Italy and Switzerland both declining by 2%.
Germany remained the largest auto-producing nation, accounting for 21% of total production, followed by Spain at 12% and Czechia at 8%. Notably, China emerged as a significant player in the European market, moving into fifth place in 2025, up from ninth in 2024. This shift was driven by a 77% increase in imports to Europe, highlighting the growing influence of Chinese automotive brands.
Daniele Ministeri, a senior consultant at Jato, emphasized that this trend reflects not only the increased presence of Chinese brands but also the registrations of European models produced in China, such as the Mini Cooper and Dacia Spring. This diversification in production sources is reshaping the competitive landscape in Europe.
Battery Electric Vehicle Growth
The BEV segment saw significant growth, with a total of 2.6 million units registered in 2025, marking a 29% increase from the previous year. This surge brought the overall market share of BEVs to 20%. A notable factor in Tesla’s decline was consumer backlash against political interference by its owner, Elon Musk. In contrast, Volkswagen reclaimed the title of Europe’s best-selling BEV brand, registering 274,000 units—an impressive 56% increase year-on-year.
The growth of the Volkswagen Group can be attributed to the successful introduction of the ID.7 and the Skoda Elroq, both of which play crucial roles in the group’s strategy to reduce emissions and avoid penalties. Meanwhile, Tesla experienced a 27% drop in registrations, totaling 236,357 units. However, the Model Y remained the top-selling single BEV model in Europe, with 149,805 vehicles registered.
Surge in Hybrid Vehicles
Plug-in hybrid electric vehicles (PHEVs) also saw robust performance, with registrations hitting 1.3 million units in 2025—an increase of 34% compared to the previous year. The BYD Seal UDM-i emerged as the best-selling PHEV model, with 72,000 units sold. Full-hybrid electric vehicles (HEVs) registered a 10% year-on-year growth, with Toyota maintaining its leadership position, largely due to the popularity of models like the Yaris Cross, Yaris, and Corolla.
Mild-hybrid electric vehicles continued to gain traction, becoming the second best-selling powertrain in Europe with a 16% increase in registrations. This growth is notable as it comes at the expense of internal combustion engine vehicles, which saw a 20% decline in registrations. The shift towards electrification is evident as consumers increasingly favor hybrid options over traditional engines.
Extended-range electric vehicles (EREVs) are also emerging as a sector to watch. Currently dominated by Stellantis’s joint venture with Leapmotor and its EREV-powered C10, EREVs saw 6,000 units registered in 2025. Ministeri noted that EREVs have been steadily growing in China and are expected to gain traction in Europe as more original equipment manufacturers (OEMs) introduce this technology in 2026.
