Plug-In Hybrid Boom Drives European Car Sales Higher in May

Europe’s car market saw a notable uptick in May, with new-car registrations rising 1.9% year over year to 1.11 million units. Plug-in hybrid (PHEV) sales, which surged 46% to surpass 100,000 units for the month, primarily drove this growth.

The appeal of plug-in hybrids-offering both electric driving and the reassurance of a fuel tank-has made them a preferred choice for consumers navigating high EV prices and uneven charging infrastructure.

Battery-electric vehicles (BEVs) also posted a 27% increase, claiming a 17% share of the market, but plug-in hybrids were the clear standout in May’s sales data.

Chinese Automakers Gain Ground as Competition Intensifies

Chinese manufacturers, led by BYD, continued to expand aggressively in Europe, more than doubling their market share to 5.9% and outselling Tesla in some markets for the first time.

BYD’s strong performance reflects a broader trend: Chinese brands are leveraging competitive pricing and new model launches to capture a growing slice of the European market.

This shift is challenging established players and forcing European and American automakers to accelerate their electrification strategies.

Did you know?
Combined, plug-in hybrid and battery-electric vehicles now account for a record 25% of new car registrations in Europe, with some countries like Norway and Denmark seeing shares above 60%.

Regional Winners and Losers Highlight Diverging Trends

While Germany, the UK, and Spain posted gains in new-car registrations, France and Italy saw declines, underscoring the uneven recovery across the continent.

Germany, Europe’s largest market, recorded a 45% increase in BEV registrations and a substantial rise in PHEV sales. Spain led the region with a 173% surge in PHEV registrations, while Poland’s plug-in market more than doubled.

In contrast, France experienced a 19% drop in BEV registrations, highlighting persistent regional disparities in EV and hybrid adoption.

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Hybrids Outpace Combustion as Market Preferences Shift

Hybrid-electric vehicles (HEVs) and mild hybrids (MHEVs) also gained traction, with HEVs capturing more than a third of the EU market share. As gasoline and diesel car sales continue to decline-now accounting for just 38% of the market-hybrid and electric models are increasingly dominating new registrations.

Tightening EU emissions regulations and consumer incentives are accelerating this transition, although full battery-electric adoption still faces cost and infrastructure hurdles.

Automaker Strategies Evolve Amid Market Shake-Up

Legacy automakers are responding to the hybrid and EV boom with new model launches and pricing strategies. Volkswagen posted modest gains, buoyed by refreshed electric models, while Stellantis faced a 3% drop in sales amid struggles with its aging combustion-engine lineup.

Renault’s Dacia brand helped offset a decline in Renault-branded sales, while Tesla’s European deliveries fell 28% as it lost ground to both Chinese and legacy rivals. The competitive landscape is shifting rapidly, with innovation and adaptability proving crucial for market share.