Stock Markets January 27, 2026

Battery-electric car registrations surpass petrol in EU in December as market dynamics shift

ACEA data show fully electric sales overtook petrol for the first time in December amid regulatory back-and-forth and intensifying competition

By Priya Menon
Battery-electric car registrations surpass petrol in EU in December as market dynamics shift

Data from the European Automobile Manufacturers Association (ACEA) show fully electric vehicle sales in the European Union overtook petrol car sales in December for the first time. The data also show broader growth in car registrations across Europe, shifting market shares among manufacturers, and policy moves that could ease the pace of EV adoption.

Key Points

  • Fully electric car registrations in the EU exceeded petrol car registrations in December for the first time - impacting the auto manufacturing and EV sectors.
  • Overall European car registrations grew for a sixth straight month, with 2025 volumes at a five-year high despite still trailing pre-pandemic levels - relevant to automotive supply chains and production planning.
  • Manufacturer market shares shifted in December: Volkswagen and Stellantis saw registration gains, Renault declined slightly, Tesla registrations fell sharply, while BYD posted a large percentage increase - affecting competitive dynamics across OEMs and suppliers.

Fully electric passenger car registrations in the European Union surpassed petrol-powered car registrations in December for the first time, according to data released by the European auto lobby ACEA. The milestone comes as policymakers have proposed loosening emissions regulations, creating a complex backdrop for the industry.

The ACEA data indicate Tesla, a U.S. battery-electric brand, continued to cede market share to rivals including Chinas BYD and Europes top-selling group Volkswagen. Overall, European car sales maintained year-on-year growth for a sixth consecutive month, with registration volumes reaching the highest total in five years across Europe for 2025, though they still lagged levels recorded before the pandemic.

Industry observers note several headwinds for Europes automotive sector, including increasing competition from Chinese manufacturers, potential U.S. import tariffs, and the challenge of meeting domestic EV adoption requirements in a way that remains profitable for carmakers. In December, the EU announced a plan to drop what had effectively been a 2035 ban on combustion engine vehicles, responding to pressure from struggling manufacturers. At the same time, groups advocating for electric transport have emphasized that a rapid transition to EVs is necessary to reduce CO2 emissions.

Despite the regulatory softening, analysts cited in the ACEA report expect electric vehicles to continue gaining acceptance among buyers.


By the numbers

  • Sales across the EU, Britain and the European Free Trade Association rose 7.6% to 1.2 million cars in December, and climbed 2.4% to 13.3 million cars for the full year of 2025, according to ACEA figures.
  • Brand-level registration changes in December included a 10.2% increase at Volkswagen and a 4.5% rise at Stellantis, while Renault registrations declined 2.2% that month.
  • Teslas registrations fell 20.2% in December, while BYDs registrations jumped 229.7% in the same period.
  • Total EU car sales rose 5.8% to almost one million vehicles in December, and increased 1.8% to 10.8 million over the year.
  • December registrations of battery electric, plug-in hybrid and hybrid electric cars rose 51%, 36.7% and 5.8%, respectively, and together made up 67% of bloc registrations, up from 57.8% in December 2024.

Promotional note included in the original data release

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Where the data are limited or context remains unresolved, the ACEA release itself contains the primary figures and observations summarized above.

Risks

  • Policy uncertainty after the EUs December plan to drop an effective 2035 combustion engine ban could slow the pace of EV adoption - a regulatory risk for automotive manufacturers and EV supply chains.
  • Rising competition from Chinese automakers and potential U.S. import tariffs pose trade and competitive risks that could pressure margins for European producers and their suppliers.
  • Difficulty in profitably meeting domestic EV regulations could strain manufacturers financials and capital allocation, creating risks for investors and equipment suppliers tied to EV production.

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