Europe’s new car market grew by 2.3% in 2025, with battery electric cars (BEVs) proving a “notable” bright spot.

Latest Jato Dynamics data for 28 European markets, including the UK, reveals 13.2 million units were registered last year; up on 2024 but still down 16.5% on the 15.8 million units registered in pre-pandemic 2019.

On a year-on-year basis, growth in Europe was driven by Norway (+39%), Spain (+13%), Austria (+12%) and Poland (+8%), while volumes declined in Belgium (-7%), France (-5%), Italy (-2%) and Switzerland (-2%).

Electric vehicles of all types made significant gains, with a total of 2.6 million EVs registered last year.

Battery electric vehicles (BEVs) saw notable growth, with volumes increasing by 29% compared to 2024 to claim a market share of 20%. Volkswagen overtook Tesla to claim the status of the continent’s best-selling BEV brand, with 274,000 units registered in total in 2025, up 56% year on year and aided by the introduction of the ID.7. But the Tesla Model Y remained the best-selling BEV in Europe last year, followed by the Škoda Elroq and the Tesla Model 3.

Plug-in hybrid electric vehicles (PHEVs) also performed highly, hitting 1.3 million units in 2025 (+34% year on year). Notably, the BYD Seal UDM-i became the best-selling PHEV model, with 72,000 units.

Registrations of full hybrid electric vehicles (HEVs) grew by 10% year on year, with Toyota maintaining its leadership position thanks to the popularity of the Yaris Cross, Yaris and Corolla.

Mild hybrid electric vehicles (MHEVs) were the second best-selling powertrain in Europe, growing by 16% year on year and continuing to steal market share from conventional ICE vehicles – the latter was the only powertrain in decline with registrations down 20%.

While extended-range electric vehicles accounted for a small proportion of volumes – with 6,000 units in 2025, driven largely by the Leapmotor C10 – both legacy OEMs such as Volkswagen and BMW and newer Chinese entrants have declared their intentions to explore production.

Daniele Ministeri, senior consultant at Jato Dynamics, said EREVs were an “area to watch” in Europe in 2026, with sales expected to increase as more OEMs introduce this technology.

Chinese brands shake up rankings

At a group level, the top three rankings remained unchanged in 2025, with Volkswagen in pole position (+6%), followed by Stellantis (-2%) and Renault (+6%).

But SAIC, parent firm to MG and IM (Intelligence in Motion), grew volumes by 26% to occupy tenth place, surpassing both Tesla and Nissan. The group become the second best-selling Chinese OEM in the region after Volvo parent Geely.

At a brand level, Škoda reached third position, overtaking BMW and remaining only behind Volkswagen and Toyota, with volumes up 7% on 2024 – largely thanks to the introduction of the Elroq.

Cupra excelled, with a 33% increase in registrations driven also by its new Terramar and Tavascan. Alfa Romeo was another strong performer, reaching 60,000 units (+33% year on year) with the introduction of the Junior model.

Jato’s data also shows 2025 was a pivotal year for new entrants to the market from China, with Chinese-owned brands growing volumes by 44% year on year. BYD and Omoda nearly tripled their volumes compared to 2024, while Jaecoo and Leapmotor reached almost 60,000 and 33,000 units respectively, the latter in its debut year.

The powertrain mix of Chinese-owned brands also evolved in 2025. BEV share decreased by five percentage points, from 40% to 35%, while HEVs and PHEVs both saw increases of eight percentage points. “Unlike the first wave of Chinese brands that entered the European market, which were focused primarily on BEVs, Chinese players are now adapting to regional preferences with a more diversified offering,” Ministeri commented.

“China’s growing influence in the European automotive market is reflected in the numbers. The increasing presence of vehicles produced in China on the continent is not only due to the continued rise of Chinese brands but also reflects registrations of European models produced in China,” said Ministeri.