Europe's June car sales saw the largest decline in 10 months, with electric vehicle growth continuing to slow

The European automotive market experienced its most severe decline in ten months in June, raising concerns over weak demand.

According to data released by the European Automobile Manufacturers Association (ACEA) on Thursday, new car registrations in June fell by 5.1% to 1.24 million, marking the largest monthly decline since August last year. Despite the continued rise in demand for electric vehicles, the growth rate has dropped to its lowest level this year, at only 14%.

The trade organization stated in a release, "Consumers are clearly still maintaining a cautious attitude, and stronger demand stimulus measures will remain a key factor in accelerating the transition."

This adds to the woes of European automakers, who are losing global market share, while U.S. tariff policies also pose a threat to their overseas operations.

Sales Decline Intensifies, German Market Leads the Drop

As the largest automotive market in Europe, Germany has become the main drag on overall sales decline in June.

Data shows that new car registrations in Germany plummeted by 14% in June, with a cumulative decline of 4.7% in the first half of the year.

The markets in Italy and France are also under pressure, with June sales dropping by 17% and 6.7%, respectively. This reflects consumers' continued caution, as economic uncertainty suppresses car-buying demand.

Despite the overall downturn, the UK market bucked the trend with a 6.7% increase in June sales, mainly due to the government reintroducing a maximum electric vehicle purchase subsidy of £3,750 (approximately $5,100) last week.

Plug-in Hybrids Become Market Highlights

Against the backdrop of overall sales decline, plug-in hybrid vehicles have emerged as one of the few bright spots.

In June, registrations of plug-in hybrid models in Europe surged by 38%, with more buyers opting for models that combine electric driving and fuel engines.

Sales of pure electric vehicles rose by 14% in the same month, primarily supported by the launch of new models and government incentives in some countries. However, the penetration rate of electric vehicles across European countries remains uneven, reflecting disparities in infrastructure development and national policies.

Industry Dilemma Under Multiple Pressures

European automakers are facing multiple challenges.

On one hand, in the Chinese market, Volkswagen, BMW, and the Mercedes-Benz Group are losing market share and pricing power amid fierce market competition.

On the other hand, management turmoil is also troubling major manufacturers, as Stellantis NV recently appointed a new CEO, while Renault is searching for a permanent CEO.

For manufacturers with operations in the U.S., tariffs imposed by Trump on imported cars and parts put billions of euros in profits at risk.

The European Commission previously granted automakers a three-year buffer period, delaying the stricter carbon dioxide emission targets originally set to take effect this year, which may have alleviated some pressure on local car companies