EU Car Market 2026: Electrification Accelerates – ICE Vehicles Lose Ground

Brussels – Despite geopolitical uncertainties, the European passenger car market has grown by 4.2 percent so far in 2026. Behind the overall figure lies a structural shift: battery electric vehicles and plug-in hybrids are gaining significant market share, while internal combustion engine (ICE) vehicles are losing ground and conventional hybrids continue to expand.

According to the European Automobile Manufacturers’ Association (ACEA), around 3.8 million passenger cars were newly registered in the EU by the end of April 2026. Battery electric vehicles (BEVs) achieved a market share of 19.7 percent, while plug-in hybrids (PHEVs) reached 9.6 percent – together accounting for around 29 percent, more than ever before. Conventional hybrids, whose electric motor primarily improves efficiency, increased to 38.2 percent, whereas gasoline and diesel vehicles together dropped to 30.2 percent.

BEVs and PHEVs Record Strong Growth Across All Major EU Markets

In the first four months of 2026, battery electric vehicles reached nearly 747,000 new registrations and a market share of 19.7 percent, compared to 15.3 percent (around 557,000 units) in the same period of 2025 – an increase of approximately 34 percent. Plug-in hybrids also recorded substantial growth with around 364,100 new registrations: their market share rose from 7.9 percent (just under 288,000 units) to 9.6 percent. Together, BEVs and PHEVs accounted for 29.3 percent of all new passenger car registrations in the EU.

Growth in the BEV segment was primarily driven by the major markets: Italy recorded an increase of 73.1 percent, France 48.2 percent, and Germany 41.3 percent. Growth in plug-in hybrids was even more pronounced, led by Italy (+99.2%), Spain (+64.3%), and Germany (+17.6%). ACEA attributes this development to “new and revised tax incentives and subsidy schemes in major European countries.” Government purchase incentives therefore remain a key driver of market development.

Combustion Engines in Decline, Conventional Hybrids Rise to 38 Percent

Gasoline and diesel vehicles lost market share across all major EU markets. Gasoline-powered cars recorded around 855,000 new registrations, a decline of nearly 18 percent compared to the same period last year (around 1,040,000 units). Their market share fell from 28.5 percent to 22.5 percent. All major markets posted declines, led by France (-36.6%), Spain (-18.6%), Italy (-18.0%), and Germany (-17.2%).

Diesel vehicles continued their downward trend at a more moderate pace: around 292,300 new registrations corresponded to a market share of 7.7 percent, down from 9.6 percent (around 349,400 units) a year earlier.

Conventional hybrids, by contrast, continued to grow, reaching around 1,450,000 new registrations and a market share of 38.2 percent. In the same period of 2025, the figure stood at 35.3 percent (around 1,285,000 units). Growth was driven mainly by Italy (+25.5%) and Spain (+19.7%), while Germany (+6.6%) and France (+2.3%) also contributed positively.

Outlook: Vehicle Electrification Continues to Gain Momentum

Registration data for the first four months of 2026 indicate an accelerating shift in the automotive market toward BEVs and PHEVs. The pace of this transition will depend on several factors, including future fossil fuel prices, the broader economic environment, the availability of competitively priced electric vehicles, and the stability of government purchase incentives.

Source: IWR Online, 27 May 2026