New-vehicle registrations rose 1.7% in February from a year earlier to 979,321 units, the European Automobile Manufacturers’ Association said Tuesday. Sales climbed in Germany, Spain, Italy and the UK, offsetting a decline of nearly 15% in France.
The rate of EV growth outran steep declines for fuel-burning cars. Sales in Germany for vehicles with a plug jumped by a combined 27% after low- and middle-income earners started to tap into a new subsidy scheme. In France, battery-only car demand surged 28%, while sales for petrol, diesel and hybrid-powered vehicles fell.
Driven by new models like Renault SA’s electric R5 compact car, Skoda’s Elroq mid-size SUV and BYD Co.’s Dolphin hatchback, sales of battery-only and plug-in hybrids accounted for more a third of the market during the first two months of the year.
Passenger car sales continue to be driven by battery and plug-in vehicles “as new, cheaper models are coming into the market and country policies are encouraging EV adoption,” Citi analysts led by Harald Hendrikse said in a note.
While overall deliveries were roughly stable, the start of the war in Iran that’s engulfing the Middle East may deal a setback to an expected recovery for vehicle demand in Europe, according to Bloomberg Intelligence analyst Gillian Davis.
“War-driven economic uncertainty and faster inflation, potentially prompting rate hikes, could knock consumer confidence, deterring spending on big-ticket items like new cars,” Davis said in a note.
Bloomberg Intelligence offered a new outlook in the event of a prolonged conflict, saying European sales for 2026 risked falling 4%, compared to a pre-war prediction for a 2% gain.
Growing demand for EVs and plug-in hybrids is benefiting Chinese carmarkers including BYD and Zhejiang Leapmotor Technology Co., which took market share in a dozen European markets, Jefferies analysts led by Philippe Houchois said. European Union import tariffs on Chinese-made EVs have only marginally slowed the uptake.
BYD and SAIC Motor Corp., which owns the MG brand, both outsold Tesla Inc. during February after sales growth of 162% and 12%, respectively. The two manufacturers’ combined sales totaled 40,314 cars, or 4% of the market.
Europe’s carmakers are fighting back with a growing offering of competitive EVs. Volkswagen AG’s namesake brand and its Skoda and Cupra nameplates are rolling out new EVs for around €25,000 ($29,041) this year. More than half of the 22 models Renault will launch in Europe by 2030 will be electric.
