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Europe’s car industry began the year with new-vehicle registrations falling 3.9% in January from the same month last year to 799,625.
According to a Feb. 24 report from the European Automobile Manufacturers’ Association, the slump was driven by a continuing fall in registrations of pure internal-combustion-engine powertrains.
The sector, combining both gasoline and diesel engines, fell to a market share of 30.1%, down from 39.5% in January 2025.
Gas-powered cars were hardest hit, falling by 28.2% with the biggest drops seen in major markets including France, down 48.9%; followed by Germany with a 29.9% drop; Italy, down 25.5%; and a decline of 22.5% in Spain.
In total 175,989 new gasoline cars were registered last month with market share down to 22% from 29.5% in the same month last year.
Diesel-powered cars had a more modest fall of 22.3% and accounted for a market share of 8.1% in January.
Meanwhile, hybrid-electric powertrain vehicles remained the EU’s most popular consumer choice with registrations rising to 308,364 units, supported by growth in Italy, up 24.9%; a 9% increase in Spain, and a small 1.8% decline in Germany. Overall, hybrid models accounted for 38.6% of the total EU market.
Registrations of plug-in hybrid-electric vehicles continued to show strong growth, reaching 78,741 units in the first month of 2026. This was driven by rising volumes in key markets such as Italy, up 134.2%; Spain rising 66.7%; and a 23% climb in Germany.
As a result, new PHEVs have now leapfrogged diesel in market share compared to January 2025 taking 9.8% of the market share, up from 7.4% for the month last year.
Battery-electric vehicle registrations showed steady growth, claiming a 19.3% market share from 14.9% one year earlier.
In January 2026, 154,230 new BEVs were registered with mixed results in the four largest EU markets which claimed 60% of new registrations. While France saw a 52.1% boost and Germany up 23.8%, the Netherlands slumped 35.4%, apparently due to a strong sales push at the end of 2025, and Belgium was down 11.5%.
More than 30,000 BEVs were registered in the Netherlands in December 2025 as buyers rushed to acquire vehicles in anticipation of changes to the nation’s tax scheme, the ACEA’s Automotive Intelligence Manager, Pedro Gomes Nogueira, said in an emailed response to a WardsAuto enquiry.
“In fact, this surge was driven by announced amendments to the “bijtelling” (additional tax) liability regime,” he added.
Nogueira explained that the initial intention was to discontinue the discount on the additional tax liability for zero-emission company cars from 2026 onwards. This would have increased the rate from the discounted 17% to the standard 22%.
However, any car registered in 2025 would remain subject to the 17% rate for a maximum period of 60 months. “As a result, many electric vehicles were still registered in December to benefit from this arrangement,” said Nogueira.
“Ultimately, the government decided to maintain a reduced rate in 2026 and 2027 to 18% and 20% respectively. By that time, however, many of these vehicles had already been ordered,” he added.
