All-Electric Drives, China’s Automotive Industry Thrives

Various types of electric vehicles are in high demand in the EU market. Chinese cars, in particular, are very popular, while Tesla continues to decline. Electric vehicles are experiencing overall growth, and Chinese automakers are thriving in the EU, with Volkswagen maintaining its market leadership.

Figure 1 BYD Dolphin and Seagull production factory for one million vehicles (Source: "Car Review" citing BYD Europe)

In August 2025, the EU new car market grew by 5.3% year-on-year. According to data released by the European Automobile Manufacturers Association (ACEA), a total of 677,786 cars were sold in the EU. Statistics for the first eight months show that the EU new car market grew by 0.1% compared to last year. So far, EU car manufacturers have sold 7,168,848 cars in 2025.

The entire European market grew by 4.7% in August, with new car registrations reaching 791,349 units. The statistics for the first eight months show that new car sales amounted to 8,691,840 units, an increase of 0.4%.

In August, despite growth in almost all European markets, the increase mainly came from high-volume markets. In August, new car registrations in Germany increased by 5.0% to 207,229 units. France contributed 87,849 new cars (+2.2%), and Spain contributed 61,315 new cars (+17.2%). However, new car registrations in Italy fell by 2.7% to 67,322 units. The UK reported a decline in new car registrations by 2.0%, totaling 82,908 units.

The electric vehicle market is experiencing comprehensive growth, with all electric models benefiting from the positive performance in August. The number of new registrations for battery electric vehicles (BEVs) increased by 30.2%, reaching 120,797 units. The number of new registrations for plug-in hybrid vehicles (PHEVs) rose by 54.4%, totaling 70,545 units. New registrations for hybrid vehicles increased by 14.1%, reaching 229,970 units. In August, new registrations for gasoline vehicles fell by 16.3%, totaling 178,156 units. Diesel vehicles have dramatically declined. The number of new registrations for internal combustion engine vehicles dropped by 17.5%, with only 59,327 units registered.

Figure 2: New Registration Volume in the EU for August 2025 (ACEA, classified by drive type) (Source: "Car Review")

Hybrid vehicles clearly dominate the new car market, with statistical data from this year showing that hybrids account for 34.7% of the new vehicle registration market share. Gasoline cars follow in second place with a market share of 28.1%. Battery electric vehicles significantly lead with a market share of 15.8%, ahead of diesel vehicles at 9.4%. Plug-in hybrid vehicles are catching up, currently holding a market share of 8.8%.

Chinese car companies are developing rapidly, while Volkswagen still maintains a leading position in the market. From the perspective of various brands, European consumers are increasingly favoring Chinese models. BYD's new vehicle registrations reached 67,632 this year, a year-on-year increase of 244%. SAIC Group (MG) sold 136,629 vehicles in eight months, surpassing both Seat and Nissan, with a growth rate of 33.1%. Tesla is still unable to benefit from the electric vehicle boom. In 2025, the American company has sold only 85,673 vehicles so far, a decrease of 42.9% compared to last year.

Eight months later, the Volkswagen Group continues to lead the EU market with a market share of 27.5%, followed by Stellantis Group (15.9%) and Renault Group (11.4%). The strongest single brand is Volkswagen (11.4%), followed by Toyota (7.7%) and Škoda (6.5%). Other brands in order are Renault (6.1%), BMW (5.9%), Peugeot (5.3%), Dacia (5.2%), and Mercedes (5.0%).

The new car registration data from the European Union indicates a clear fact. Pure internal combustion engine vehicles, whether gasoline or diesel, are becoming increasingly unpopular. In contrast, electric vehicles are very popular. Pure electric vehicles are rapidly on the rise, while plug-in hybrid vehicles are still struggling. Compared to Chinese car manufacturers, whose businesses are continuously growing, Tesla is unable to benefit from the electric vehicle boom.

CompilerDr. Liu Xiaoyi (GuanYu Electromechanical Technology (www.costkey-solutions.comFounder and CEO, over 20 years of experience in new production processes, vehicle planning (including new energy vehicles), and cost engineering at Daimler AG (Mercedes-Benz) in Germany; recipient of the German Physics Prize; expert in the Ministry of Industry and Information Technology's "Changfeng Plan" for new energy and intelligent connected vehicles industry think tank; senior technical management at Great Wall Motors and Hichain Energy; author of the key book "Cost Engineering System of Manufacturing Enterprises" in the China National Publishing Group's "National Heavy Equipment Publishing Project"; graduate enterprise mentor at the School of Electronic Information and Electrical Engineering, Shanghai Jiao Tong University; guest professor at the School of Automotive Engineering, Tongji University; specially invited lecturer in cost engineering at the Talent Exchange Center of the Ministry of Industry and Information Technology/China Automotive Industry Training Base/Gaodun Finance and Tax Academy; author of the "Liu Xiaoyi Column" in Gaishi Automotive; CostKey is the first cloud-based enterprise-level cost engineering SaaS software system independently developed by Guanyu Electromechanical Technology, awarded the Shanghai Municipal Science and Technology Commission Innovation Fund.