Vehicle registrations in five major European markets increased 5.2% year-over-year in July on a working-days-adjusted basis, Jefferies said, continuing a trend of modest recovery for the new-car market.
On a year-to-date basis, unit volumes are up 6.4% year-over-year. When sales from Chinese and other non-traditional manufacturers are excluded, growth for the year-to-date stands at 1.5% and was 1.3% in July alone.
Electrified vehicles and market share shifts
Battery electric vehicles (BEVs) accounted for a larger slice of the market, with penetration rising by 8.5 percentage points year-over-year to 23.7%. Plug-in hybrid electric vehicles (PHEVs) also increased their share, up 1.4 percentage points to 11.5%.
Jefferies noted shifts in manufacturer market share: Chinese original equipment manufacturers and other entrants collectively gained 3.3 percentage points, while Volkswagen lost 2.0 percentage points and Ford's share declined by 0.9 percentage points.
Aggregate European volumes and country-level performance
The brokerage estimated that total European sales rose 3.7% year-over-year to about 1.1 million units in July. Despite the uptick, Jefferies said the market remains approximately 28% below 2019 levels.
Among the five markets tracked, the United Kingdom posted the strongest year-over-year expansion at 11.7%, followed by France at 9% - both noted as benefiting from easier year-ago comparisons. Italy and Spain each recorded growth close to 4%. Germany was the weakest of the five with only 1% growth, even though its order backlog was reported up 10% year-over-year.
Country specifics on electrification and incentives
France reached a record BEV share of 35% after the July 16 relaunch of the "leasing social" Round 3 program. The UK achieved a 27.5% BEV share, with BEV volumes up 44.5% year-over-year; Jefferies attributed part of that surge to ZEV-mandate discounting despite the absence of consumer grants.
Italy and Spain experienced more hybrid-led expansion: hybrid electric vehicles were up 48% year-over-year in Italy and 47% in Spain, reflecting different uptake patterns compared with France and the UK.
Outlooks from industry bodies
Industry associations have adjusted their forecasts. Italy's UNRAE raised its 2026 outlook to about 1.61 million units, which represents 5.5% growth and a recovery totaling more than 84,000 units. The UK's SMMT increased its 2026 BEV share forecast to 27.4% from 26.8% in April and projects a 32.1% BEV share for 2027.
Manufacturer performance versus the market
Among manufacturers covered, Mercedes-Benz Group, Renault and Toyota posted above-market growth in the period. By contrast, Tesla, Ford, Nissan, Volkswagen, Volvo and Stellantis underperformed relative to the market.
The data and forecasts from Jefferies and industry bodies portray a market in recovery, led by increased electrified vehicle penetration and shifting competitive dynamics, while overall volumes remain noticeably below pre-pandemic levels.