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In the first half of 2025, the electric vehicle (EV) market in Europe is experiencing a significant surge, with new registrations of battery electric vehicles (BEVs) increasing by approximately 34% year-on-year. This robust growth, which is also evident in the used car market, marks a strong rebound after a slower 2024 and reflects growing consumer confidence and expanded model ranges.
The growth in EV sales is primarily driven by BEVs, which now constitute about 17.4% of new car sales in Europe. The Netherlands, in particular, has seen a marked advantage for EVs due to lower acquisition taxes and road tax, contributing to a lower total cost of ownership (TCO) compared to internal combustion engine (ICE) vehicles.
Key players in the market include Volkswagen, Tesla, BYD, and BMW, with Chinese brands like BYD increasing their market presence due to competitive pricing and expanding dealership networks. The overall new car market is almost stagnant, growing only about 2% or less, indicating that EVs are gaining share mostly at the expense of ICE vehicles.
The rapid growth and acceptance of BEVs typically help maintain stronger residual values compared to earlier years, boosted by rising demand and longer warranty / battery guarantees that reduce depreciation concerns. However, specific recent data on residual values were not directly covered in the search results.
Ongoing improvements in EV technology include greater battery efficiency and range, making BEVs more practical and lowering range anxiety. The expansion of charging infrastructure, supported by European policies, is increasing convenience and usability. Stricter CO2 emissions regulations are pushing automakers to innovate and reduce costs per kilometer, while competitive pricing from Chinese manufacturers is further driving down upfront costs.
These technology advances and policy supports are steadily improving the TCO of EVs in Europe, bringing it closer to or below that of ICE vehicles in many segments, especially when accounting for lower fuel and maintenance costs.
Looking ahead, the EU is looking to address the used-car market in its transition to electric vehicles. In the German used-car market, BEVs recorded one of the most significant price adjustments last year, and the pace of adjustments is expected to slow in 2025. The European Commission's Industrial Action Plan for the automotive sector includes a proposal for a 100% CO emission reduction target for passenger-car fleets by 2035.
Key performance indicators in Spain's used-car market show greater stability for BEVs, with no significant ageing effect and prices showing greater stability. Spain, Italy, and Poland might experience a flattening of EV demand in 2025 and 2026, requiring acceleration in subsequent years to meet targets.
Full hybrids (HEVs) and mild hybrids (MHEVs) enjoyed double-digit growth, with HEV registrations increasing by 22.9% and MHEVs accelerating by 15%. In Germany, diesel was calculated to have the best TCO at a set age and mileage, followed by the BEV option, then petrol, with the PHEV in last place.
EV adoption is not consistent across Europe, with the Nordics leading in market share, and southern countries like Spain and Italy, as well as Eastern European countries like Poland, Romania, and Hungary, seeing lower shares. BEVs in Spain are forecast to come under pressure in 2025 due to stock saturation of older models.
Portugal is an outlier, with every third car registered in the country last year being an EV, due to recent governmental incentives and geographical factors. In Belgium, the outlook is more negative in 2025, but the impact in 2026 is expected to be minimal and even positive by 2027.
Economic uncertainty may be causing some consumers to hesitate about purchasing BEVs, as many all-electric models are still comparatively expensive. Removing tax advantages in the Netherlands would make the TCO picture similar to what is seen in Germany.
The BMW X1, with its BEV, PHEV, and ICE options, was part of exemplary analysis in a recent webinar, and its TCO results were mirrored by other brands' models, representing a market-wide trend. The Netherlands offers a near-polar opposite TCO outcome across powertrains, with the BEV option being the cheapest choice, followed by the PHEV, and diesel being the most expensive.
An amendment to the plan could see CO limits between 2025 and 2027 combined into an average target, allowing carmakers to compensate for exceeding targets in one or two of these years by overachieving in the remaining time. Transitional powertrains, like hybrids, offer more economical technology and do not rely on charging infrastructure.
Europe's new light-vehicle market, including passenger cars and light-commercial vehicles (LCVs), saw growth in 2024, but sales still lagged behind pre-COVID-19 pandemic levels. EV Volumes' forecasting team expects the emissions proposal to pass through the European parliament, and predicts that Europe's EV market will see a slightly flatter 2025 and 2026 before speeding up in 2027.
The rapid growth in the EV market and the significant surge in new registrations of BEVs in Europe are influenced by factors such as growing consumer confidence, expanded model ranges, and improvements in EV technology. This technology advancement includes greater battery efficiency and range, which are making BEVs more practical and reducing range anxiety.
The robust growth in the EV market is having a visible impact on the overall car market, with key players like Volkswagen, Tesla, BYD, and BMW increasing their market presence, while Chinese brands like BYD are expanding dealership networks to gain more market share. The growth in EV sales is primarily driven by BEVs, which are now gaining traction in the used car market as well, contributing to a lower total cost of ownership (TCO) compared to internal combustion engine (ICE) vehicles.
