Car sales across Europe, including the UK and the European Free Trade Area (EFTA), experienced a 2.1% decline in January, according to the latest data from the European Automobile Manufacturers’ Association (ACEA). While sales of fully electric vehicles (EVs) saw impressive growth, rising by 37.3%, the overall downturn was largely driven by a significant decline in the sale of combustion engine vehicles.

The U.S.-based electric carmaker Tesla saw a sharp sales drop of 45.2% compared to January 2024, exemplifying the broader market slowdown, even as EV sales surged. Meanwhile, Chinese carmaker SAIC Motor, which owns the MG brand, bucked the trend with a 36.8% increase in sales, highlighting the growing presence of Chinese automakers in the European market.

ACEA’s data revealed that total car registrations in the EU, UK, and EFTA were just below 1 million units in January, marking the lowest registration volume since August. This decline was felt across many major European markets, with Spain being one of the few exceptions, experiencing a modest 5.3% increase in car sales.

However, France, Italy, and Germany saw notable declines in car registrations, with reductions of 6.2%, 5.8%, and 2.8%, respectively. The UK also recorded a 2.5% decrease in sales, contributing to the overall slump in the region’s automotive market.

Despite the decline, the significant rise in electric vehicle sales highlights a shift in consumer preferences toward greener and more sustainable transportation options. The data underscores the growing competition in the European car market, with EVs increasingly playing a central role in reshaping the industry’s future.