Should a slow start for the EU’s new-car market cause concern in 2026?

24 February 2026

For the second consecutive year, the EU saw a fall in new-car registrations during January. But is this trend a reason for alarm in 2026? Plus, is the tide turning away from hybrid dominance towards a more electrified landscape? James Roberts, Autovista24 web editor, assesses the latest data.

The EU’s new-car market kicked off 2026 with a year-on-year decline in January. A total of 799,624 new cars were registered across the 27 member states, according to Autovista24 calculations of ACEA data.

This marked a 3.9% year-on-year decline, the second consecutive negative start to a year. In total, just 10 EU member states saw year-on-year increases in new-car registrations during January. The result brought an end to six months of consecutive growth, with the EU’s largest markets witnessing varying fortunes.

Germany endured a troubled start to 2026 with a 6.6% slide in new-car deliveries. With 193,981 units registered, the EU’s largest market saw falls in all but two powertrain variants. Following a disappointing 2025, France followed suit with a 6.6% drop and 107,157 newly registered vehicles.

Meanwhile, Spain eked out a 1.1% increase in volumes, with new electric vehicle (EV) incentives yet to find their feet. Italy fared the best of the ‘big four’ EU markets. It recorded a 6.2% volume increase, with 141,993 new cars taking to the country’s roads. This was boosted by a significant uptake in plug-in hybrid (PHEV) demand.

Hybrid popularity reaching a peak?

In 2025, hybrids, including both mild and full-hybrid versions, were the most popular new powertrain for drivers in the EU. January 2026 provided a continuation of the trend. However, this could change as the year develops.

In total, 308,364 new hybrids took to EU roads in January. This equated to an upswing of 6.2% and 18,024 additional units. This strong start to the year ensured a new 38.6% market share high, up 3.7 percentage points (pp).

Amid its overall January decline, Germany saw hybrid volumes drop by 1.8%. In total, 58,206 new models featured the technology in the month. This followed on from marginal growth in December. As the EU’s biggest new-car market, Germany sets the stage in terms of powertrain demand. The technology may have reached a natural peak in the country, as the tide shifts towards EV sales.

For France, January brought stagnant hybrid demand, with a 0.1% year-on-year improvement. Conversely, Spain witnessed a 9% increase, while 74,422 new hybrids joined Italy’s car parc, capping a 24.9% boost.

In total, 15 of the EU’s 27 nations recorded year-on-year hybrid gains. Following a year in the doldrums, Estonia registered the highest upswing at 158.3%. Bulgaria also saw triple-digit hybrid lift of 140%. Austria, Czechia, the Netherlands and Portugal all witnessed hybrid growth.

However, Poland, the EU’s fifth-largest market in terms of overall volumes, saw a 17.2% year-on-year decline in hybrid registrations. Meanwhile, the country continued a trend of strong EV adoption, suggesting a shift towards fully-electric cars.

Solid start to 2026 for EVs

EV uptake, made up of battery-electric vehicles (BEVs) and PHEVs, appeared strong across the EU in January. However, this was measured against a comparatively low baseline 12 months ago. The plug-in share equated to 29.1% in January as a total of 232,971 plug-in models made their way to customers. This was up 6.9pp from 12 months prior.

Breaking down the powertrains, 154,230 new BEVs made their way to EU customers in January, up 24.2%. This ensured a market share of 19.3%, up 4.4pp year on year. Meanwhile, PHEVs accounted for 9.8% of new-car volumes with 78,741 vehicles registered. This equated to a 2.4pp uplift. Volumes increased by 28.7%, the fastest growing of all powertrains.

Breaking down EU EV uptake

The EU’s largest markets underwent mixed fortunes in January when it came to new BEV adoption.

Germany returned buoyant all-electric vehicle numbers in the month. In total, 42,692 BEVs were registered, a 23.8% year-on-year increase. This was coupled with a healthy 23% lift to PHEV figures, amounting to 21,790 units. This came as a new domestic incentive framework, retroactively available from 1 January, was rolled out.

France saw a 52.1% increase in BEV registrations. In total, 30,307 battery-powered models reached customers. This was assisted by a combination of tax reduction, infrastructure support and regulatory incentives. However, this comes amid wider market declines.

Fired by incentives, Spain proved a consistent BEV powerhouse in 2025. Despite measures changing at the end of last year, January was a good month. In total, 6,472 new BEVs meant a 29.1% delivery increase. Meanwhile, PHEV demand soared by 66.7% year on year, amounting to 8,740 units. Domestic industry bodies have urged for clarity regarding incentives, hoping to ensure the country’s electrification can continue in 2026.  

Poland continued its 2025 trend. January saw year-on-year BEV increases of 216.1%, the highest figure in the EU. This was achieved with 3,544 units. Coupled with this, Polish PHEV registrations jumped by 95.7%. Demand for these powertrains has been facilitated by the country’s NaszEauto incentives programme, which was launched in 2024.

PHEV power proving important

Of the EU’s major new-car market players, Italy saw PHEV popularity come to the fore in January. In total, 11,638 new models made their way to customers, up 134.2% year on year. Industry body UNREA highlighted an expanded range of models and an attractive tax framework as motivation for this healthy business.

The BEV market saw a notable decline in the Netherlands, down 35.4% fall in January. However, the reverse was true for PHEVs. In total, 8,025 new plug-in hybrids left Dutch forecourts, ensuring a year-on-year boost of 49.1%.

Austria also witnessed double-digit increases in both BEV and PHEV registrations in January, with 23% and 66.7% growth, respectively. This came despite there being no EV purchase subsidies in the country, as written by the European Alternative Fuel Observatory.

Instead, a mixture of tax incentives and cash subsidies, plus a favourable approach to EV fleet support, helped boost numbers. Plus, a new electric mobility information platform called eMove Austria was launched in January.

Despite a 4.2% drop in BEV volumes, Czechia enjoyed notable PHEV gains. In total, the country saw 850 units registered, a 32.6% uplift.

ICE drifts into 2026

It is no small surprise that January saw internal-combustion engine (ICE) registrations continue to fall across the EU. Amid legislative changes to CO₂ targets, both new petrol and diesel interest have petered out across all major markets.

Combined petrol and diesel registrations reached 240,539 units, signalling a 26.7% year-on-year volume decline. Coupled with this, the powertrain group captured 30.1% of the EU new-car market, a 9.4pp dive.

This dwindling fuel type group remains a relatively strong market player. In January, ICE registrations exceeded combined BEV and PHEV volumes by just 7,568 units. The plug-in market share trailed petrol and diesel by just 1pp. With the narrowing gap, the coming months could see the EV market overtake ICE, signalling a shift in powertrain dynamics.

In terms of new petrol registrations, 175,989 new vehicles took to EU roads in the opening month of 2026. This marked a 28.2% drop. Market share came out to 22%, down 7.5pp on 12 months prior. Five nations recorded petrol volume increases. Austria saw a 3.3% lift, while Estonia saw an eye-catching 248.8% surge. Yet this amounted to just 286 units.

Diesel declined in 23 of the 27 EU new-car markets. January saw 64,550 new vehicles registered across the bloc. This marked a 22.3% year-on-year fall. Once again, Estonia saw triple-digit increases at 431.4%, as 186 new diesels found their way to customers.