The European automotive sector underwent a significant transformation towards the end of 2025, with new car sales in Europe a notable increase of 5.8% in December, surpassing the 2.1% year-on-year growth rate recorded in November of the same year. These figures reflect a gradual market recovery and a radical shift in consumer preferences towards environmentally friendly options.
Unprecedented boom in electric cars
Official data in the report revealed a dramatic shift in the European transport landscape, with sales of battery electric vehicles (BEVs) surging by a staggering 51% year-on-year last month. This growth wasn't limited to fully electric vehicles; plug-in hybrid electric vehicles also saw a significant increase of 36.7%, while conventional hybrid vehicles recorded a 5.8% rise.
This major shift is mainly attributed to strict European policies towards carbon emissions, and the general trend of EU countries towards reducing dependence on fossil fuels, which has encouraged consumers to adopt clean technology.
A sharp decline in internal combustion engines
In contrast, conventional cars faced a sharp decline, reflecting the approaching end of the internal combustion engine era in Europe. Sales of gasoline cars fell by 19.2%, while diesel cars suffered even greater losses, declining by 22.4%. This decrease led to a sharp reduction in the combined market share of gasoline and diesel cars, projected to reach only 35.5% in 2025, compared to the 54.2% they held in 2024.
Performance varied among major European markets
At the national market level, results varied among major economies. Germany led the way with a 9.7% increase in car sales, followed by Italy with 2.3% growth. This growth in Germany—the heart of the European automotive industry—points to positive indicators for the industrial sector.
On the other hand, other major markets recorded a decline, with sales in France falling by 5.8% and in Spain by 2.2%, reflecting the varying economic conditions and purchasing power of consumers across the EU countries.
Market shares and future challenges
Final data for 2025 revealed that battery electric vehicles (BEVs) captured 17.4% of the EU market share, a significant increase from 13.6% the previous year. Even more striking was the dominance of hybrid electric vehicles, which captured 34.5% of the market, making them the preferred choice for EU consumers and surpassing both gasoline and diesel options.
Despite these positive indicators in December, total new car sales in Europe last year as a whole fell by 1.8% year-on-year to around 2.88 million cars, a figure that is still below pre-pandemic levels, which poses challenges for manufacturers to regain overall sales momentum in the coming years.
