Business Desk 
Aug 29, 2025
In contrast to industry analysts' estimates given previously in the wake of low car sales, July 2025 proved to be the best month in over a year for Europe's new car sales, with sales rising 5.9%, marking a u-turn for the struggling industry.
Europe's 2025 car sales data
It's worth noting that sales of plug-in hybrids in the European Union experienced their largest increase since January 2023, while battery-electric vehicles (BEVs) saw their biggest jump since August 2023, the highest in two years.
The surprising aspect of the story is that despite the surge in EV sales, Tesla lost market share in Europe for seventh consecutive month, falling behind China’s BYD, which made its way to the sales data for the first time.
Data released by the European Automobile Manufacturers Association (ACEA) reflected that this boost followed consumer confidence continuesly declining.
Having introduced a new electric vehicle (EV) incentive plan in June to replace the subsidy scheme that ended in 2023, Germany reported remarkable upticks of 58% for BEVs and 83.6% for plug-in hybrids in July 2025.
The European car industry faces several challenges, including U.S. import tariffs, stiff competition from China, and difficulties in meeting domestic EV regulations. ACEA CEO Ola Kaellenius recently expressed concerns in a letter to European Commission President Ursula von der Leyen, stating that the EU’s targets to cut CO2 emissions from vehicles, including a complete reduction for cars by 2035, are now unrealistic.
Overall car sales in the EU, Britain, and the European Free Trade Association touched 1.09 million in July, with major increases being felt by Volkswagen and Renault, while Stellantis registering a dip.
