European car sales surged in September: BYD sales soared by 398%, Tesla sales declined by 10%.
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In September, the European car market saw its third consecutive month of growth, with surging sales mainly driven by demand for more affordable electric vehicle models.
According to data released Tuesday by the European Automobile Manufacturers' Association (ACEA), new car registrations in Europe in September rose 11% year-on-year to 1.24 million units. This growth was fueled by strong sales of all-electric vehicles and plug-in hybrid vehicles, which together increased by one third, with plug-in hybrid deliveries soaring by 62%.
Among major automakers, Renault Group and Stellantis performed well, while BYD’s sales surged by 398%, with its market share rising from 0.4% a year ago to 2%. In stark contrast, Tesla’s sales dropped by 10%, with its market share squeezed down to 3.2%.
Despite the impressive September figures, this growth momentum may be difficult to sustain. The European auto industry still faces multiple challenges, including slowing demand for premium electric vehicles, uncertainty around the 2035 ban on fossil fuel cars, and increasingly tense trade relations, all of which cast a shadow over the market’s outlook.
Accelerated Electrification, Affordable Models Drive Growth
The core driver of growth in the European car market in September came from the acceleration of electrification, especially the spread of affordable models. That month, all-electric vehicle (EV) sales rose 22%, while plug-in hybrid vehicles (PHEV) sales saw an even larger jump of 62%. Together, these two categories accounted for nearly one-third of new car registrations in the region.
Strong demand for more economic models, such as the Skoda Elroq crossover from Volkswagen Group and the Renault Group R5 compact car, was a key growth driver.
Among the five biggest European markets, new car deliveries increased across the board, with the UK and Germany seeing particularly notable rises of 14% and 13%, respectively.
Winners and Losers: BYD and Tesla’s Contrasting Performance
While the broader market improved, performance varied greatly among major brands. BYD was the biggest winner, with September sales surging by 398% year-on-year and market share jumping from 0.4% to 2%.
Europe's main car groups also performed steadily. Renault Group sales rose 15.2%, Stellantis 11.5%, and Volkswagen Group 9.7%. BMW Group and Mercedes-Benz saw more modest growth, at 4.2% and 0.5% respectively.
However, Tesla’s downward trend continued. According to the data, the brand’s sales fell 10%, with its market share shrinking from 4.0% a year ago to 3.2%.
Uncertain Prospects for Market Recovery Amid Multiple Challenges
Despite encouraging September sales, European automakers still face a series of severe challenges, making long-term market recovery highly uncertain.
First, the pace of EV adoption, especially for premium models, has not met expectations. This month Volkswagen cut production at a German plant due to soft demand for its Audi Q4 e-tron EV. Stellantis also suspended production at some European plants this month.
Second, policy uncertainty is dampening EV adoption. The EU plans to phase out new combustion engine vehicle sales by 2035, but this plan faces challenges. German Chancellor Merz is pushing to relax the measure, while France stated this month that the EU must remain “flexible” to some extent.
Finally, geopolitical risks and trade friction are also pressuring the industry. According to analysts, Europe’s automakers are struggling to cope with risks such as tariff policies advocated by former US President Trump. Such external factors could intensify at any time, negatively impacting supply chain stability and market confidence.
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