European automakers shift focus to hybrid vehicles as electric car sales slow down
Hybrid electric vehicles (HEVs) are gaining popularity in Europe, with Q1 2024 showing a significant increase in demand compared to fully electric vehicles (EVs). This trend, according to JATO Dynamics and market analyses, is primarily driven by affordability and regulatory factors.
Cost Differences Favour Hybrids
The average battery electric vehicle (BEV) prices in the Eurozone are still roughly 22% higher than comparable internal combustion engine (ICE) models in 2024. Many consumers seeking electric mobility but worried about high BEV prices are choosing hybrids as a cost-effective compromise.
Consumer Concerns Persist
European consumers value the climate benefits of EVs, but remain concerned about the affordability, battery range, and charging infrastructure of BEVs. Although BEV battery performance and driving range have improved significantly, the supply of competitively priced, mass-market BEVs is still limited, leaving space for hybrids to gain share.
Strategic Focus on Hybrids
Some manufacturers, such as BYD, have strategically focused on hybrids by launching aggressively priced plug-in hybrid electric vehicles (PHEVs) to meet demand and navigate regulatory challenges, especially in Europe. BYD notably outsold Tesla in Europe in April 2025 partly due to strong hybrid sales.
A Transition Phase for the Market
As early adopters of BEVs (typically higher-income buyers) near saturation, the wider mass-market is still turning to hybrids, which better fit their cost and usability expectations.
Key Figures
- HEV registrations reached 328,700 units between January and March 2024, the highest since 2021.
- BMW witnessed a 60% year-on-year increase in registrations.
- HEV registrations increased by 18% compared to Q1 2023 and surged over 50% compared to the same period in 2022.
- In March 2024, Tesla registered 39,000 units, but saw a 36% drop in registrations compared to the same month the previous year.
- Chinese EVs represented 6.1% of the total all-electric BEVs in March 2024.
- Chinese car brands delivered 33,000 units in March 2024, with a 0.7% increase compared to March 2023.
- Of the total Chinese car deliveries in March 2024, 36% were electric models.
The overall new car market showed a 4.8% and 23% growth in Q1 2024, compared to the same quarters of 2023 and 2022, respectively. The Tesla Model Y and Model 3 remain the first and second most registered EVs in Europe, respectively. Volvo performed a 70% increase in registrations, thanks to the boost of the EX30, becoming the third most registered EV in Europe.
However, high prices and fading government subsidies have impacted consumer confidence in EVs, leading to uncertainty and a lack of incentives that are pushing away potential EV buyers. This uncertainty, coupled with the affordability and lower risks associated with HEVs, is likely to continue driving the surge in demand for hybrid vehicles in Europe.
- The surge in demand for hybrid electric vehicles (HEVs) in Europe, as shown in Q1 2024, is primarily due to their cost-effectiveness compared to battery electric vehicles (BEVs), as the average BEV prices in the Eurozone are relatively higher than those of internal combustion engine (ICE) models.
- European consumers are seeking electric mobility but are concerned about the high BEV prices, limited supply of mass-market BEVs, and inadequate charging infrastructure, causing a shift towards hybrids that offer a cost-effective compromise.
- Manufacturers, like BYD, are strategically focusing on hybrids by launching aggressively priced plug-in hybrid electric vehicles (PHEVs) to meet demand, navigate regulatory challenges, and gain market share, as evidenced by BYD outselling Tesla in Europe in April 2025 due to strong hybrid sales.
- As the wider mass-market is still turning to hybrids, which better fit their cost and usability expectations, and early adopters of BEVs near saturation, the hybrid industry's growth can be seen in the high sales figures, with HEV registrations reaching over 300,000 units between January and March 2024, the highest since 2021, and significant increases in registrations from manufacturers like BMW.
