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European Auto Market Slumps as Electrified Vehicles Gain Traction

Tariffs, retooling costs, stricter CO₂ rules have squeezed profits across Europe, pushing automakers to prioritise electrified models

Overview

  • New-car registrations in the EU fell 1.9% in the first half of 2025, with June plunging 7.3% amid softer demand in key markets
  • Battery electric, full-hybrid and plug-in hybrid models together captured nearly 59% of Europe’s new-vehicle market in
  • VoVolkswagen Group’s operating profit dropped 33% to €6.7 billion, citing US import tariffs, restructuring charges and tighter margins on EVs
  • Dacia climbed to sixth in Spain with a 25.1% year-on-year sales increase to 34,489 units, led by strong performance from Sandero and Spring
  • Argentina’s five-year zero-tariff import programme fuelled a 55.9% surge in electrified registrations, exhausting the 50,000-unit quota and handing Chinese brands an 85% share