EVs power Europe's car market to 3.2% growth in May; Chinese brands expand share as legacy automakers slip

Electrified vehicles dominate

In May, battery-electric vehicles (BEVs) accounted for 20% of all new car registrations in the EU, up from 15.3% a year earlier. Registrations of fully electric cars surged 42.9% to 203,417 units, while plug-in hybrids rose 13.2% and conventional hybrids climbed 8.2%. Together, electrified powertrains made up more than two-thirds of the market. Petrol and diesel sales each fell by around 19%, with petrol dropping to 210,383 units and diesel to 69,482.

The market continued to benefit from robust consumer demand for a range of electrified technologies across key European markets, sustained by new and revised tax benefits and incentive schemes.

Chinese brands accelerate

Chinese automakers posted dramatic gains. Leapmotor's registrations jumped 465.1%, Chery's 244.1%, and BYD's 136.6%. Geely and SAIC also grew by double digits. Collectively, Chinese brands captured 9% of EU sales in the first five months of the year, up from 6% a year earlier, according to EY. BYD's market share reached 2.1%, overtaking Tesla's 1.9%.

Chinese carmakers are slowly but surely conquering market share in Europe - especially in southern European countries, inexpensive Chinese models are real bestsellers.

Legacy automakers under pressure

Volkswagen remained the EU market leader but saw registrations fall 3.6% to 254,011 units. Stellantis dropped 2.6% and Renault 1.3%. In contrast, BMW rose 3.7% and Mercedes-Benz edged up 0.7%. The German auto industry's overall EU market share slipped from 39.0% to 38.3%.

Market drivers and regional splits

The ACEA attributed the EV surge to government purchase incentives and high fuel prices stemming from the Iran conflict. Overall EU car registrations rose 3.2% in May to 955,013 vehicles, with year-to-date growth at 4%. Germany, Italy and Spain posted gains, while Belgium, the Netherlands, Sweden and France saw declines. EY noted that May was the strongest for sales since 2019, though volumes remain well below pre-pandemic levels.

The plus in electric cars is basically pleasing - but it is primarily government subsidies that are responsible for the rising sales figures.

Tesla rebounds

Tesla extended its recovery, with registrations soaring 107.9% to 28,610 units in May, marking a fourth consecutive month of growth after a prolonged slump. Its year-to-date market share stood at 1.9%, just behind BYD.