European Market Monitor: Cars and Vans – January 2025
By: Michelle Monteforte, Uwe Tietge, Sonsoles Diaz, Sandra Wappelhorst, Alexander Plummer
February 25, 2025
The European car market experienced some shifts in January 2025, according to the latest market monitor. This report analyzes passenger car registrations, CO2 emissions, and the evolving landscape of electric and hybrid vehicles.
Passenger Car Registrations
The average share of battery electric vehicles (BEVs) among total new registrations in Europe was 16% in January 2025. This figure represents a slight dip from the 17% recorded in December 2024.
Leading the pack in BEV market share was the KG Mobility manufacturer pool, boasting a 44% share. Following closely were Mercedes-Benz and BMW, each with 24%, Kia at 22%, and Volkswagen with 17%. Notably, Kia’s BEV share saw a significant increase of 8 percentage points compared to December 2024.
After incorporating brands such as Smart, Volvo, and Polestar, the Mercedes-Benz manufacturer pool experienced a 6-percentage-point increase in its BEV share compared to the previous month, reaching 24% in January 2025. Meanwhile, the Hyundai (13%), Renault-Nissan-Mitsubishi (13%), and Tesla (12%) pools trailed in BEV sales.
However, these manufacturers demonstrated strength in hybrid electric vehicle (HEV) sales. Their shares of HEVs were 22%, 26%, and 22% respectively, far exceeding the European average of 13%. Suzuki dominated the mild hybrid electric vehicle (MHEV) segment with an 83% share, followed by Mercedes-Benz and BMW, each with 36%.
The share of plug-in hybrid electric vehicles (PHEVs) in new registrations in Europe remained steady at 7% in January 2025, mirroring the average for the full year of 2024.
Average CO2 Emissions
Average carbon dioxide (CO2) emissions, including compliance credits, among manufacturer pools decreased substantially in January to 103 g CO2/km. This is a reduction from the 2024 average of 107 g CO2/km.
KG Mobility, BMW, and Kia were in compliance with their estimated 2025 targets. Volkswagen (17 g CO2/km above target) and Suzuki (13 g CO2/km above) were the farthest from reaching their goals. Manufacturer pools are now only 10 g CO2/km from the 2025 average target of 93 g CO2/km.
Examining individual car brands with at least a 1% market share, Volvo showed the greatest over-compliance, at 35 g CO2/km below its 2025 target. Cupra was the second most compliant, at 15 g CO2/km below its brand-level goal. Audi, Ford, and Mercedes-Benz are currently furthest from their 2025 brand-level targets — at 35, 28, and 27 g CO2/km above, respectively.
Passenger Car Registrations by Country
Country-specific data reveal variations in market performance. Passenger car registrations in Belgium fell by 13% in January 2025 compared to January 2024, while Austria and Sweden saw increases of 16% and 14%, respectively.
Combined BEV and PHEV market shares averaged 24% in Europe in January 2025, a rise of two percentage points from the 2024 average. Norway (97%), Denmark (66%), Sweden (51%), and the Netherlands (50%) all exceeded the 50% mark for BEV and PHEV shares. Belgium (43%), Ireland (28%), and Germany (25%) also surpassed the European average.
Belgium experienced the largest increase in BEV registrations, with shares increasing by 5 percentage points from January 2024. In contrast, Sweden’s BEV shares dropped by 6 percentage points.
Sweden demonstrated the highest PHEV registration shares (23%), while Poland led in HEV registrations with 27%. Italy had the highest MHEV shares at 33%.
Passenger Car Registrations by Owner
In 2024, private cars accounted for over 40% of new registrations in Europe. Company fleets followed with 36%, and car dealers and manufacturers, along with short-term rentals, made up 14% and 9% of the total registrations, respectively.
Short-term rental registrations experienced greater fluctuation than other owner types, varying from approximately 13% of sales in May to only 5% in October 2024.
Spotlight: Germany
Germany showed significant developments in January 2025, with nearly 17% – or 34,500 – of all new passenger car registrations being BEVs. This represented a substantial 54% year-on-year increase, making January 2025 the strongest January on record for BEV registrations in Germany, and an additional 8.5% share of the market comprised PHEVs.
After the termination of purchase incentives in January 2023 for PHEVs, September 2023 for company BEVs, and December 2023 for all BEVs, the VDA forecasts the market share of BEVs and PHEVs to increase significantly to 31% in 2025. Domestic production of BEVs and PHEVs accelerated, reaching a record 155,700 vehicles in November 2024 and a total of 1.35 million in 2024.
The VDA predicts a 24% increase in BEV and PHEV production, projecting about 1.7 million units for 2025.
Definitions, Data Sources, Methodology, and Assumptions
- Manufacturer pools: Automakers can form pools to jointly comply with CO2 targets. This publication uses 2025 pools defined by the European Commission’s “M1 pooling list” (version of January 15, 2025) and “Declarations of intent to form Open Pools” (version of January 7, 2025). Key brands are: BMW Group (BMW, Mini), Hyundai (Hyundai), KG Mobility (Great Wall Motor, Xpeng), Kia (Kia), Mercedes-Benz (Mercedes-Benz, Polestar, Smart, Volvo), Renault-Nissan-Mitsubishi (Dacia, Mitsubishi, Nissan, Renault), Suzuki, Tesla (Alfa Romeo, Citroën, Fiat, Ford, Jeep, Lancia, Leapmotor, Lexus, Mazda, Opel, Peugeot, Subaru, Tesla, Toyota), Volkswagen (Audi, Cupra, Porsche, SEAT, Škoda, VW).
- Abbreviations: CO2 = carbon dioxide emissions; g/km = grams per kilometer; ZLEV = zero- and low-emission vehicle.
- Technical scope: The focus is on new passenger car registrations. BEVs run solely on electric motors, PHEVs combine combustion engines with electric propulsion (rechargeable externally). HEVs and MHEVs combine two propulsion systems, traditionally a combustion engine and an electric propulsion system, but HEVs can drive partially on pure electric, while MHEVs typically assist the combustion engine.
- Geographic scope: The European CO2 regulation applies to the European Economic Area (EEA), including the 27 EU member states plus Iceland, Liechtenstein, and Norway. Registration and electric vehicle share data cover all these countries, except for Cyprus, Liechtenstein, Hungary, Malta, and Slovakia. CO2 emission data also excludes Bulgaria and Romania.
- Data sources: Dataforce (new vehicle registrations), European Environment Agency (EEA; vehicle WLTP test mass and eco-innovation credits), Verband der Automobilindustrie (VDA; historic vehicle production as well as forecasts on registrations and production for Germany).
- Test procedures: CO2 values use the Worldwide harmonized Light vehicles Test Procedure (WLTP).
- Flexible compliance mechanisms: Manufacturers can lower CO2 levels through eco-innovation technologies (up to 6 g/km) and a ZLEV factor (if ZLEV share exceeds 25%, the CO2 target is increased).
- Mass-based targets: Each manufacturer pool has a specific 2025 CO2 target based on the average WLTP test mass of new vehicles registered. The average WLTP test mass per manufacturer pool is assumed to be the same as in 2023.
- Owner types: Private cars, company fleets, short-term rentals, and car dealers/manufacturers.
This report is a collaborative effort involving the ICCT, IMT-IDDRI, and ECCO think tank.
