Electric vehicle (EV) adoption in Europe accelerated sharply in 2025, with sales rising 30% year-on-year to an all-time high, marking one of the strongest growth phases for clean mobility in the region. In a major milestone, battery-electric vehicles outsold petrol cars for the first time in December, highlighting a structural shift in consumer preferences.
Despite the strong market performance, Tesla experienced a challenging year in Europe, recording a 38% decline in annual sales. This downturn allowed Chinese automaker BYD to overtake Tesla as the world’s largest EV manufacturer, driven by aggressive pricing and expanding product offerings.
EV Market Share Continues to Rise
Electric cars accounted for 17% of total EU passenger car sales in 2025, up from 14% in 2024. The growth was supported by new and refreshed EV models from established European brands such as Renault, Volkswagen, and BMW. However, overall new car registrations in the EU increased by only 1.8%, remaining below pre-pandemic levels.
December proved to be a turning point. EV sales jumped 51% year-on-year, capturing 22.6% market share, narrowly surpassing petrol vehicles at 22.5%. Hybrid and diesel vehicles made up the remaining share, according to data from Europe’s auto industry association.
Policy Debate Intensifies Around 2035 Ban
Even as EV adoption rises, automakers continue to express concerns over long-term demand sustainability. Industry leaders argue that sales momentum still relies heavily on subsidies and discounts. As a result, the European Union is considering a softer stance on its 2035 zero-emission mandate, proposing that 90% instead of 100% of new car sales meet zero-emission standards. The proposal includes conditions such as the use of low-carbon steel and sustainable fuels.
To reinforce demand, Germany recently announced a €3 billion EV subsidy program, signaling continued government support for electrification.
Chinese Brands Gain Ground in Europe
European EV growth has also been fueled by more affordable electric models from Chinese manufacturers. BYD captured 1.4% market share across the EU and UK in 2025, while MG Motor, owned by SAIC, reached 2.3%, strengthening competition in the mass-market EV segment.