New car sales in Europe rose 5.9 percent in July, the best month for more than a year in a boost for the struggling industry as consumer confidence weakens, European Automobile Manufacturers Association data showed on Thursday.

Plug-in hybrid sales in the European Union recorded the biggest jump since at least January 2023, when the ACEA started reporting the figure, while those of battery-electric cars had the biggest increase since August 2023.

Germany, which in June presented an EV incentive plan replacing a subsidy scheme removed in 2023, recorded increases of 58% and 83.6% in BEV and PHEV sales respectively in July.

Despite rising EV sales, battery-electric carmaker Tesla lost market share in Europe for a seventh consecutive month and trailed China's BYD (1211), which was included in the monthly sales data for the first time.

WHY IT'S IMPORTANT

Europe's battered car industry faces challenges including U.S. import tariffs, competition from China and difficulties in meeting profitably domestic regulations for EV adoption.

ACEA CEO Ola Kaellenius co-signed a letter on Wednesday to European Commission President Ursula von der Leyen saying that EU targets to cut CO2 emissions from vehicles, including a 100 percent reduction for cars by 2035, are no longer feasible.

BY THE NUMBERS

Sales in the European Union, Britain and the European Free Trade Association rose to 1.09 million cars in July, ACEA data showed.

Registrations at Volkswagen and Renault rose 11.6 percent and 8.8 percent year-on-year, respectively, but fell 1.1 percent at Stellantis.

Tesla's sales dropped 40.2 percent, squeezing its market share to 0.8 percent from 1.4 percent a year ago. BYD's sales jumped 225.3 percent to give it 1.2 percent of the market.

Total EU car sales rose 7.4 percent. Registrations of battery electric, hybrid electric and plug-in hybrid cars were up 39.1 percent, 56.9 percent and 14.3 percent, respectively, to account collectively for 59.8 percent of the bloc's registrations, up from 51.1 percent in July 2024.

Overall sales in Germany rose 11.1 percent, and fell 5 percent in the UK, 7.7 percent in France and 5.1 percent in Italy. Spain, Poland and Austria recorded increases of 17.1 percent, 16.5 percent and 31.6 percent, respectively.

REUTERS

Europe’s July car sales rise most since April 2024, BYD ahead of Tesla