Europe’s new car market posted modest growth in February 2026, but beneath the surface, the data reveals a market undergoing a profound structural shift towards electrification.
According to the latest figures from JATO Dynamics, total registrations across the Europe-28 region reached 978,190 units in February, representing a 1.7% year-on-year increase. While the headline growth figure appears relatively subdued, the underlying powertrain mix tells a much more dynamic story — one increasingly dominated by battery electric vehicles (BEVs) and plug-in hybrids (PHEVs).
Electrification drives the market forward
The most significant takeaway from February’s data is the continued surge in electrified vehicle adoption. BEV registrations rose by 16% year-on-year, reaching a market share of 19.4% — an increase of 2.3 percentage points compared with the same month in 2025.
Meanwhile, PHEVs recorded even stronger growth, with registrations up 34%, pushing their share to 9.9%. Mild hybrids (MHEVs) also expanded steadily, growing 12% to capture 25.5% of the market, while full hybrids (HEVs) increased by 8%, maintaining a share just below 14%.
Taken together, these figures underline a clear directional shift: electrified powertrains — in all their forms — are now the primary engine of growth in Europe’s automotive sector.
Steffen Michulski, Senior Consultant at JATO Dynamics, summarised the situation succinctly: “Electrification is clearly happening. But interestingly, car manufacturers’ performance is varying a lot between different electrified powertrain types, as they navigate through the business environment of electrification transition.”
ICE decline continues unabated
While electrified vehicles surge, the decline of internal combustion engine (ICE) vehicles is accelerating. Registrations of ICE models dropped by 20% year-on-year in February, reducing their market share to 29.9% — a steep fall of 7.9 percentage points.
This shift is particularly notable given that ICE still holds the largest share in key markets such as Germany and Poland. However, the gap between ICE and electrified alternatives is narrowing rapidly, with MHEVs now approaching parity in overall share.
The trend suggests that Europe is entering a transitional phase where traditional combustion powertrains are no longer dominant, but electrification has not yet fully consolidated into a single prevailing technology.
Regional disparities remain
Despite the overall shift towards electrification, adoption remains uneven across Europe. Markets with strong incentive structures and well-developed charging infrastructure — including the Netherlands, Belgium, France and Great Britain — are accelerating their transition more rapidly.
In contrast, Southern and Eastern European markets continue to rely more heavily on combustion engines, reflecting economic disparities, infrastructure limitations, and differing regulatory environments.
Germany remains Europe’s largest automotive market by a considerable margin, recording 229,000 registrations in February. Italy follows with 174,000 units, France with 151,000, and the UK with 105,000.
Notably, in Germany, BEVs and MHEVs combined accounted for nearly half of all registrations — a strong indicator of how quickly electrification is taking hold in the region’s largest market.
Winners and losers in the BEV race
The competitive landscape within the BEV segment is becoming increasingly polarised. While some manufacturers are benefiting from strong new product launches, others are struggling to maintain momentum amid intensifying competition.
Among the standout performers, Skoda recorded a remarkable 112% increase in BEV registrations, driven largely by the success of the Elroq. Ford and Toyota also posted impressive gains of 97% each, highlighting the impact of fresh model introductions and expanding EV portfolios.
In contrast, several established players saw significant declines. Volkswagen, BMW, and Audi all experienced double-digit drops in BEV registrations, down 16%, 20%, and 11% respectively. These declines are attributed to a combination of model transitions and growing competitive pressure, particularly from newer entrants and Chinese manufacturers.
Tesla retained its position as the most-registered BEV brand in Europe for February, with 17,534 units — up 11% year-on-year. Volkswagen followed with 16,518 units, despite its overall decline, while Skoda secured third place with 14,733 units after its dramatic growth.
Further down the rankings, Renault (+27%) and Mercedes (+16%) posted solid gains, while BYD (+83%) and Leapmotor (+789%) demonstrated the rapid ascent of Chinese brands in the European market.
Chinese challengers gain ground
The emergence of Chinese manufacturers is one of the most significant developments in the European BEV landscape. Brands such as BYD and Leapmotor are expanding rapidly, leveraging competitive pricing, advanced technology, and aggressive market entry strategies.
Leapmotor’s performance is particularly striking. The brand recorded a 789% increase in registrations, driven largely by the success of the T03 city car. This model has quickly gained traction in urban markets, offering an affordable entry point into electric mobility.
The growing presence of Chinese brands is reshaping competitive dynamics, forcing established European manufacturers to accelerate their EV strategies while managing the complexities of transitioning away from ICE.
Model-level dynamics: Tesla still leads, but competition intensifies
At the model level, Tesla continues to dominate, with the Model Y remaining Europe’s best-selling BEV in February, recording 10,701 registrations — a 22% increase year-on-year.
However, competition is intensifying. The Skoda Elroq surged into second place with 8,348 units, representing a staggering 441% increase, while the Tesla Model 3 secured third position despite a slight 3% decline.
Other notable performers include the Leapmotor T03, which climbed to fourth place with 6,058 units following a 677% increase, and the Skoda Enyaq, which maintained steady growth.
In contrast, Volkswagen’s ID family is facing headwinds. Registrations of the ID.4 fell by 15%, the ID.3 by 11%, and the ID.7 by 24%, highlighting the challenges facing the German giant as it navigates model updates and intensifying competition.
BMW’s iX1 also recorded a 10% decline, reflecting broader pressures within the premium EV segment.
Traditional leaders under pressure
Despite the shifts within the BEV segment, Volkswagen remains Europe’s most-registered car brand overall, with 99,745 units in February. However, this represents a 4% decline year-on-year, underscoring the challenges facing even the market leader.
Skoda secured second place with 65,146 units (+19%), followed by Toyota with 62,589 units (-3%) and Renault with 54,190 units (-7%).
BMW, Peugeot, Audi, and Mercedes all experienced varying degrees of decline, while Dacia and Kia also saw notable drops.
These figures illustrate a broader trend: traditional OEMs are increasingly split between those successfully capitalising on electrification and those struggling to adapt.
Electrifying times ahead
Looking ahead, the trajectory is clear. Despite recent policy adjustments regarding the phase-out of ICE vehicles, the shift towards electrification continues to gather pace.
The February data highlights two key trends shaping the European automotive market. First, the transition to electrified powertrains is accelerating, driven by regulatory pressure, technological advancements, and changing consumer preferences. Second, the competitive landscape is becoming more fragmented, with new entrants — particularly from China — challenging established players.
For consumers, this means greater choice and increasing affordability in the EV market. For manufacturers, however, it represents a period of intense transformation, requiring significant investment, strategic agility, and a willingness to embrace new business models.
As the market continues to evolve, one thing is certain: electrification is no longer a future prospect — it is the defining force reshaping Europe’s automotive industry today.
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