The European car market experienced a decline in January 2025, with passenger car registrations dropping by 1.9% compared to the same period in 2024. According to data from JATO Dynamics covering 28 European markets, a total of 993,068 passenger cars were registered last month.
ICEs and Plug-in Hybrids See Decline, BEVs Gain Momentum
Internal combustion engine (ICE) vehicles and plug-in hybrids (PHEVs) recorded significant drops, with registrations decreasing by 10% and 6%, respectively. In contrast, battery electric vehicles (BEVs) saw a notable surge, with over 166,000 units registered—marking a 38% year-on-year increase.
Felipe Munoz, Global Analyst at JATO Dynamics, attributed the overall decline to the removal of incentives and last-minute deals that had boosted sales in December 2024.
Tesla’s Struggles in the European Market
Despite the strong performance of BEVs overall, Tesla witnessed a significant downturn in registrations, recording only 9,913 units in January—a stark 45% drop compared to the same month last year. This decline is largely attributed to the anticipated model changeover of the Tesla Model Y and the increasing political involvement of Tesla’s CEO.
“It’s not unusual for sales to drop just before a new generation or an updated model is introduced, as the brand reduces production in anticipation of the new release,” Munoz explained. “Tesla can expect a rebound once the refreshed Model Y hits the market.”
Tesla’s Model Y, which was Europe’s best-selling car in 2023 and the fourth best-seller in 2024, saw a significant decline, along with the Model 3, which recorded a 44% drop in registrations.
Chinese Brands Gain Market Share
While the overall European market posted a decline, Chinese automakers continued their upward trajectory, registering 37,134 units in January—a 52% increase compared to January 2024. Their market share climbed from 2.4% to 3.7%, surpassing Ford, which registered 35,790 units.
Chinese brands particularly capitalized on hybrid models (HEVs) amid the European Commission’s tariffs on Chinese BEVs. Approximately 7,500 HEVs registered in January were from Chinese manufacturers, accounting for 6.1% of the total HEV market. PHEVs from Chinese brands also grew significantly, with registrations rising from 1,276 in January 2024 to 4,035 in January 2025.
Volkswagen and Renault Lead the Market
Volkswagen Group and Renault Group emerged as the biggest market winners in January. Volkswagen Group secured a 26.7% market share, registering nearly 265,000 units—an increase of 5% year-on-year. Renault, on the other hand, recorded 98,800 registrations, reflecting a 7% growth.
Volkswagen’s performance was driven by its SUV models and the Volkswagen ID.7, with the Cupra brand outperforming Seat due to strong demand for the Terramar, Tavascan, Leon, and Born models. Renault’s growth was propelled by its SUV lineup, which saw a 48% surge, including 4,000 units of the Renault 5.
Dacia Sandero Maintains Top Spot
Despite a 15% drop in registrations, the Dacia Sandero remained Europe’s best-selling model in January 2025. The Volkswagen Golf followed in second place, maintaining its position from the previous year.
Four new models entered the top 10 rankings compared to January 2024:
- Dacia Duster (+20%)
- Volkswagen Tiguan (+45%)
- Fiat Panda (+10%)
- Opel/Vauxhall Corsa (+10%)
These models replaced the Skoda Octavia (-17%), Peugeot 2008 (-10%), Renault Clio (-3%), and Kia Sportage (-15%).
Among the top 50 most-registered vehicles, the Volkswagen ID.7, Volkswagen ID.4, Kia Picanto, Volkswagen Tiguan, Skoda Kodiaq, Volkswagen T-Cross, Peugeot 3008, MG ZS, Dacia Duster, and BMW X1 saw the largest volume increases. In contrast, the Tesla Model Y, Peugeot 308, Audi A3, Mini Cooper, Toyota Corolla, Dacia Jogger, Volkswagen Polo, Ford Puma, BMW 1 Series, and Ford Kuga experienced the most significant declines.
As the European car market navigates shifting consumer preferences, new model launches, and evolving trade policies, manufacturers will need to adapt their strategies to sustain growth in an increasingly competitive landscape.
