Europe’s new passenger car market started 2026 on a weaker note, with overall registrations declining despite continued growth in electric vehicle adoption, according to new data released by JATO Dynamics.
The report revealed that 953,290 new cars were registered across Europe-28 in January 2026, representing a 4.0% year-on-year decline compared with the same period last year. Major markets such as Germany and France each recorded a 6.6% drop in registrations, while Spain saw a 3.1% decline. However, the market showed resilience in Italy and the United Kingdom, where registrations increased by 6.3% and 3.4% respectively.
Despite the overall decline in car registrations, Europe’s shift toward electrification continued to gain momentum. Battery electric vehicles (BEVs) recorded a 13% year-on-year increase, accounting for 20% of the total market in January.
Plug-in hybrid electric vehicles (PHEVs) emerged as the fastest-growing powertrain, with registrations rising 32% year-on-year, increasing from 75,242 units to 99,303 units and capturing 10% market share. The growth was largely driven by new plug-in hybrid models from Volkswagen Group, including electrified versions of the Golf, Tayron, A5, and A3, along with strong demand for models such as BYD Seal U and Jaecoo 7.
Meanwhile, mild hybrid electric vehicles (MHEVs) accounted for 26% of the market, approaching the share of traditional internal combustion engine (ICE) vehicles, which continue to decline. Hybrid electric vehicles (HEVs) maintained a stable performance with 14% market share, reflecting a 4% year-on-year increase.
Commenting on the trend, Daniele Ministeri said that as demand for traditional ICE vehicles declines, MHEVs are increasingly becoming a natural replacement. He also noted that consumers are gradually shifting toward alternative powertrains, supported by the rapid growth of BEVs and PHEVs.
At the group level, Stellantis recorded strong growth with registrations rising 7.4% year-on-year. Within the group, Fiat stood out with a 24.7% increase, driven largely by the launch of the New Grande Panda. However, brands such as Peugeot and Jeep saw declines of around 5%.
Among Europe’s top automotive groups, Volkswagen Group experienced a 4.4% decline in registrations, although Škoda managed to record 9.8% growth. Meanwhile, Renault Group saw overall registrations drop 14.8%, despite Renault posting a 4.6% increase.
Chinese automakers also showed mixed performance in the European market. While established players such as Geely Group and MG reported sales declines of 7.3% and 5.3% respectively, newer entrants continued to expand rapidly. BYD registered 8,977 BEV units, marking an 86% increase, while Leapmotor recorded 3,833 BEV units, representing a 357% year-on-year surge.
The latest data highlights the ongoing transformation of Europe’s automotive market, where overall demand remains uncertain but the shift toward electrified vehicles continues to accelerate.
