European new car sales fall as uncertainty prevails

New car registrations were down by 3% year-on-year in February as market confidence remains low across the continent.

A total of 966,000 new cars were sold last month, according to data from Jato Dynamics.

Felipe Munoz, global analyst at Jato Dynamics, said: “There are still no clear signs of recovery in the European automotive industry. Uncertainty in the domestic market is being further complicated by challenges in both China and the US.”

Demand for electric vehicles (EVs) remained strong, in February, with 17% of new cars sold during the month powered by batteries.

Tesla lost significant market share, falling from 18.4%, in 2024, to 7.7%.

Munoz said: “Tesla is experiencing a period of immense change. In addition to Elon Musk’s increasingly active role in politics and the increased competition it is facing within the EV market, the brand is phasing out the existing version the Model Y – its best-selling vehicle – in anticipation of the introduction of a new refreshed version.

“During this process, brands often experience a drop in sales before they return to normal levels, once the updated model becomes widely available. Brands like Tesla, which have a relatively limited model lineup, are particularly vulnerable to registration declines when undertaking a model changeover.”

In February, registrations of the Model Y fell by 56% to 8,800 units, while registrations of the Model 3 fell by 14% to 6,800 units.

Muniz added: “The difference in volume drops between these two vehicles suggests that the decline in the brand’s overall sales is more firmly rooted in the Model Y changeover than Musk’s political activity. However, it will be interesting to see to what extent demand rebounds once the new Model Y hits markets across the region.”

In February, Chinese-owned car brands registered 19,800 new electric vehicles in Europe, outpacing Tesla which registered just over 15,700 units. In the same month last year, the former registered 23,182 units compared to the 28,131 registered by Tesla.

The best-selling Chinese-owned car brands were Volvo, BYD and Polestar. While Volvo recorded a 30% drop in BEV registrations, BYD and Polestar made substantial gains, with increases of 94% and 84% respectively. Xpeng also performed well with more than 1,000 units, closely followed by Leapmotor with almost 900 units.

Volkswagen group continued to lead the market with share of 25.8%. Stellantis followed in second position but lost 2.6 points of share when compared to February 2024 due to double-digit drops at Citroen, Opel/Vauxhall and Fiat.

Renault Group was the month’s top performer, with a 12% increase in volumes and a market share gain of 1.5 points. The group’s strong performance in February can be attributed to positive results posted by the Renault Clio, Dacia Duster and the new Renault Symbioz and Renault 5.

Much of Renault’s success was found in the BEV segment, with 9,400 BEVs registered in February, up by 96%. The French manufacturer was only outperformed by Volkswagen,which recorded a 108% increase in BEV sales.