Europe car sales fall 3.5% in January as EVs gain market share

New car sales in Europe declined 3.5 per cent year-on-year to 961,382 units in January, marking the first drop since June, according to data released Tuesday by the European Automobile Manufacturers’ Association (ACEA). The fall was driven by weaker demand in key markets including Germany, France, Belgium and Poland. Norway recorded the steepest decline, with registrations down about 76 per cent from January 2025.

Petrol car registrations fell roughly 26 per cent compared with a year earlier, with sharper contractions in France, down 49 per cent, and Germany, down 30 per cent. Petrol models’ share of the market dropped from nearly one-third to just over one-fifth during the month. In contrast, electrified vehicles gained ground. Battery-electric car registrations rose about 14 per cent, plug-in hybrids increased 32 per cent and hybrid-electric models were up 6 per cent. Together, they accounted for 69 per cent of new registrations, compared with 59 per cent in January 2025.

Among automakers, registrations for Volkswagen, BMW, Renault and Toyota declined 3.8 per cent, 5.7 per cent, 15 per cent and 13.4 per cent, respectively. BYD posted a 165 per cent increase. Stellantis and Mercedes reported gains of 6.7 per cent and 2.8 per cent. Tesla’s sales fell 17 per cent year-on-year, marking its thirteenth consecutive month of decline.

The data comes as Europe’s auto industry faces pressure from lower-cost Chinese competitors and a delayed shift toward decarbonisation. The sector is also contending with trade uncertainty after most US tariffs were ruled unlawful by the Supreme Court of the United States on Friday.>