The European light utility vehicle market declined by 8.9% in 2025
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The European light utility vehicle market declined by 8.9% in 2025
- After growing by 6.9% in 2024, the European market (30 countries: EU + UK + Switzerland + Norway) for light utility vehicles (LUVs) plunged by 8.9% in 2025, falling to 1,823,407 units compared to 2,002,023 in 2024 and 1,872,519 in 2023. The uncertain economic climate, coupled with weak growth, is causing some professionals and businesses to postpone their LUV purchases. Incentives from the European Commission to encourage the conversion of LUV fleets from diesel to electric may also be hindering some purchases.
- This moves us away from the figures reached in 2018 and 2019 (which exceeded two million annual sales) and even further from the figures reached in 2007, the year which holds the record for LUV sales in Europe (2,299,000 units).
- The biggest markets for this category of vehicle remain France (358,299 units; -5.6%), the United Kingdom (315,846 units; -10.8%), Germany (265,801 units; -5.4%), Italy (188,373 units; -5.1%), and Spain (185,559 units; +11.7%), all of which saw declines except for Spain. France and the United Kingdom still lead the way due to strong demand for small, tax-exempt sedans classified as light utility vehicles.
- In terms of powertrains, diesel remains largely dominant, but its influence is declining year after year, as it represented 81% of LUV sales in 2025 (compared to 85% in 2024). Battery electric vehicles represent 12% of LUV sales in 2025 (compared to 10% in 2024), but the European Commission's targets recommended doubling that figure.
Thermal vehicles sales reached 63 million units worldwide in 2025
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Thermal vehicles sales reached 63 million units worldwide in 2025
- Of the estimated 87.7 million light vehicles sold worldwide in 2025, 63 million wereinternal combustion engine (ICE) or mild hybrid (MHEV) vehicles, and 24.7 million were equipped with alternative powertrain (NEV = BEV + PHEV + F-HEV). Among these 24.7 million alternative powertrain vehicles, 12.30 million were BEVs (battery electric vehicles), 6.86 million PHEVs (plug-in hybrid vehicles), and 5.43 million F-HEVs (non-plug-in hybrid vehicles).
- It is in China that sales of internal combustion engine vehicles have fallen the most in recent years, from 95% of the market in 2019 to 60% at the end of 2024 and 40% at the end of 2025. It is the only one of the four major global markets (China, USA, Europe, Japan) where the majority of light vehicles sold at the end of 2025 are powered by alternative fuels, and this situation seems to anticipate the one expected to be observed in 2026.
- Europe (30 countries = EU + United Kingdom + Switzerland + Norway) is the second major market to position itself as one of the most receptive to the development of sales of light vehicles with alternative powertrains, since its sales of internal combustion engine vehicles fell from 90% in 2019 to 70% in 2024 and 65% in 2025. At the end of 2025, it even approached 55%.
- Japan is less receptive, with a 65% market share in thermal energy in 2025 compared to 75% in 2019. The US is even less receptive, with 80% market share in thermal energy in 2025 compared to 95% in 2019.
Tesla will stop production of the Model S and Model X
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Tesla will stop production of the Model S and Model X
- The American carmaker of battery electric cars Tesla has seen a decline in its global sales for two years, falling from 1.81 million units in 2023 to 1.79 million in 2024 and 1.64 million in 2025, while at the same time, its Chinese competitor BYD has gone from 3.02 million sales in 2023 to 4.27 million in 2024 and 4.6 million in 2025.
- While in 2025 BYD was marketing more than twenty different models worldwide, Tesla was only marketing four, not including the large Cybertruck pickup which is distributed confidentially.
- The revival of Tesla sales should have involved the regular renewal of its four models and the expansion of the range with one or two entry-level models , for example in the C segment and/or in the B segment, espiecially for the European market.
- However, not only has the model lineup not been renewed and will not be (we've only seen facelifts of the Model 3 and Model Y, which originated in 2018 and 2019 respectively), but the carmaker has decided to discontinue its two high-end models, the Model S and Model X, before next summer. These models date back to 2012 and 2015 respectively. Furthermore, expanding the range downwards no longer seems to be on the agenda.
- Under these conditions, even if the carmaker is considering lowering the list price of its Model 3 and Model Y to try to support their sales, it is clear that Tesla can only decline in the coming years, faced with the Chinese onslaught which will offer more and more models of all sizes, modern, attractive and competitive in terms of price.
Sales of F-HEVs reached 5.43 million units worldwide in 2025
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Sales of F-HEVs reached 5.43 million units worldwide in 2025
- Sales of non-rechargeable or full-hybrid (F-HEV) cars reached 5.43 million units worldwide in 2025 compared to 4.87 million in 2024 and 4.14 million in 2023.
- It is primarily in Japan that the full hybrid powertrain, first introduced by Toyota in 1997 on the Prius model, is prevalent. Today, it represents between 30% and 35% of the Japanese market, mainly for Toyota and its premium subsidiary, Lexus. This type of alternative powertrain, combining gasoline and electricity, continues to grow, to the point of making battery electric (BEV) and plug-in hybrid (PHEV) vehicles virtually nonexistent. F-HEVs market share fluctuated between 20% and 25% of car sales in Japan in 2019 and 2020.
- Japan far surpasses the other three major markets in terms of full-hybrid engines, at least in terms of market share, since in terms of volume, almost as many full-hybrids are sold in Japan in 2025 as in Europe or China.
- In terms of market share, Europe is on par with the USA, at around 10% of total sales. Renault's recent switch to full-hybrid powertrains has allowed this market to develop rapidly over the last two years, preventing the Toyota group from monopolizing the full-hybrid powertrain market in Europe. Finally, China seems less receptive to this type of engine, even though sales have been steadily increasing since 2019. In 2025, The market share of F-HEVs in China is around 3%.
The project of an Audi factory in the USA has been postponed
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The project of an Audi factory in the USA has been postponed
- Audi (a subsidiary of the Volkswagen Group) has reportedly postponed its plan to build an assembly plant in the United States. This project, announced last year, was prompted by new tariffs imposed by the American administration on cars imported from Europe, Mexico, and Canada.
- Unlike BMW and Mercedes, which already have assembly plants in the United States to produce their locally sold SUVs (BMW X3, X4, X5, X6, X7, XM and Mercedes GLB, GLE, GLE Coupé, GLS), Audi has to sell its Q3, Q4, Q6, Q7, Q8 SUVs from the European continent and the Q5 from Mexico.
- It is clear that with the new customs duties imposed on vehicles imported from Europe or Mexico, Audi SUVs are no longer competitive in the USA compared to BMW and Mercedes SUVs which are not subject to customs duties since they are produced locally.
- To justify the postponement of its project, Audi cites the impossibility of financing this significant additional investment, given the carmaker's deteriorating situation in the United States, precisely because of the new customs duties which have reduced Audi's sales in the country and consequently its revenues and profits. But the instability of the measures taken by the American administration could also weigh on this factory project: Will the new tariffs remain in place (see court decisions that challenge them)? If so, at what level?
- In any case, the timing for building an Audi factory in the USA may not have been the best, as Volkswagen is currently building a two billion dollar assembly plant in South Carolina for its subsidiary Scout Motors.
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