Hybrid Vehicles Surge in Popularity as European Automotive Market Recovers - Tesla Experiences Significant Decline

Thu 28th Aug, 2025

The European automotive market has shown signs of recovery, with new car sales increasing notably in July after a disappointing June. According to data released by the European Automobile Manufacturers Association (ACEA), the market saw a year-on-year rise of 7.4% in July, although there remains a slight overall decline of 0.7% in sales for the year, totaling approximately 6.5 million new vehicles.

A significant trend in this recovery is the continued ascent of hybrid vehicles, which now account for over one-third of the market share, positioning them as the leading choice for consumers. In contrast, the combined market share of gasoline and diesel vehicles has dropped to 37.7%, a decrease of ten percentage points compared to the previous year. Electric vehicles have also seen a modest increase, reaching a 15.6% share, yet this remains below the levels required for a successful transition to alternative powertrains.

As manufacturers strive to meet the European Commission's stringent CO2 emission targets, they face pressure to enhance their electric vehicle offerings. However, the Commission has recently granted an extension on certain deadlines. On Wednesday, ACEA President Ola Källenius and Matthias Zink, President of the Component Suppliers Association (CLEPA), advocated for a reassessment of the 2030 and 2035 targets, citing concerns about their achievability in light of current market conditions.

The current regulations mandate a 55% reduction in CO2 fleet emissions by 2030, with a complete ban on the sale of combustion engine vehicles by 2035. This evolving landscape highlights the challenges faced by automakers as they navigate a shift towards greener technologies.

In terms of individual manufacturer performance, Volkswagen, including its brands Audi, Seat/Cupra, and Porsche, has strengthened its market position, recording a 3.8% increase in sales during the first seven months of the year. Other brands, such as BMW, Mercedes-Benz, and Renault, also reported sales growth compared to the previous year. Conversely, Stellantis, the parent company of Opel, has experienced a decline of nearly 10% in sales since January.

Notably, electric vehicle manufacturer Tesla has faced a dramatic downturn, with sales plummeting by 43.5%. In July alone, Tesla sold only 6,600 vehicles, falling behind the Chinese manufacturer SAIC, which produces the MG brand.


More Quick Read Articles »