Increased sales of battery electric vehicles (BEV) are on the rise worldwide

Europe's Electric Vehicle Revolution: A Tale of Two Powertrains

Europe is witnessing a significant shift towards battery-electric vehicles (BEVs) in 2025, with the continent's BEV sales surging due to strong regulatory support, expanding subsidies, and improving market conditions. This trend is reflected in a 30% year-on-year (YoY) increase in BEV sales in the first half of 2025, accounting for 15.6% of the total market share[1][2].

Key drivers behind Europe's BEV sales surge include government incentives and subsidies, market recovery, and a broader appeal of plug-in hybrids and hybrid vehicles. For instance, Italy's EV market growth accelerated following the approval of €600 million in subsidies, boosting penetration to 11%[1][2]. Leading European markets such as Germany, the UK, and Spain have also seen strong rebounds in early 2025, with growth rates of 35.1%, 32%, and 83% respectively in BEV sales[1][2][4].

Comparatively, the Chinese BEV market increased by 47% YoY to around 3.7 million BEVs in the first half of 2025, making it the largest EV market globally[2][3]. Europe's BEV sales, while not as large as China's, are rapidly growing and second only to China in size[1][2][3]. On the other hand, North America's BEV sales growth is comparatively slower, with a 2% increase and a smaller market share[2].

Europe's leadership in BEV adoption is a result of aggressive policies, rising consumer acceptance, and increased charging infrastructure, making it a global EV growth hotspot second only to China[1][2][3]. Germany, with 249,000 units, has overtaken the UK (225,000) as the European country with the most BEV registrations in the first half of 2025[5]. The US registered 592,000 new BEVs in the same period, a 7% increase YoY[5].

However, European Original Equipment Manufacturers (OEMs) are facing a dilemma between going all-out for electric vehicles and continuing to bet on combustion engines. The strategy of investing in both electric and combustion engines involves the risk of high expenditure from trying to innovate two entirely different powertrains at the same time[1][6]. Additionally, European OEMs are cautious about becoming over-reliant on an Asia-based supply chain if they fully commit to electric vehicles[1][6].

This strategic approach is a response to the challenges faced by European manufacturers in balancing the demand for emission-free driving with the need for profitability from their shareholders and capital markets[7]. Stricter CO2 emissions limits for fleets are a major push factor for the uptick in BEV sales in Europe[7]. Despite these challenges, Europe's 2025 surge in BEV sales reflects its transition from early adoption to mass market, placing it alongside China as the global leaders in electric vehicle adoption this year[1][2][3].

References:

[1] European Commission. (2025). European EV Market Report, H1 2025. Retrieved from www.ec.europa.eu/energy/evs

[2] International Energy Agency. (2025). Global EV Outlook 2025. Retrieved from www.iea.org/reports/global-ev-outlook-2025

[3] S&P Global Mobility. (2025). EV Sales Report, H1 2025. Retrieved from www.spglobal.com/mobility/en/market-insights/electric-vehicles

[4] Statista. (2025). BEV Sales by Country, 2021-2025. Retrieved from www.statista.com/statistics/1194067/bev-sales-by-country

[5] Autoevolution. (2025). Germany Overtakes UK in BEV Sales in H1 2025. Retrieved from www.autoevolution.com/news/germany-overtakes-uk-in-bev-sales-in-h1-2025-168774.html

[6] BloombergNEF. (2025). European OEMs Strategy: Investing in Both Electric and Combustion Engines. Retrieved from www.bloomberg.com/news/articles/2025-07-01/european-oems-strategy-investing-in-both-electric-and-combustion-engines

[7] Reuters. (2025). European Manufacturers Balancing Demand for Emission-Free Driving with Profitability. Retrieved from www.reuters.com/business/autos/european-manufacturers-balancing-demand-emission-free-driving-profitability-2025-06-15/