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In the first quarter of 2025, Germany's new-car market witnessed a significant shift towards electrified vehicles, with plug-in hybrid (PHEV) and battery-electric vehicle (BEV) registrations on the rise.

Excluding petrol from total volumes, the German new-car market would have grown by 11.6%. However, the overall market experienced a 3.9% decline in March 2025, marking the ninth consecutive month of decline. This dip can be attributed to a significant drop in petrol-powered car registrations, which declined by 29.4%, marking its biggest year-on-year percentage decline since December 2021.

Despite this overall decline, the total number of new-car deliveries in March 2025 was the highest since June 2024, with 253,490 units. PHEV deliveries surged by 65.8% in March 2025, making it the best-performing powertrain in terms of year-on-year percentage growth.

The growth of PHEVs and BEVs in Germany's new-car market is influenced by several factors. Shifts in automaker strategies, notably Chinese manufacturers like BYD leading with aggressive PHEV strategies and vertical integration, have driven their EV registrations up by 384.5% year-over-year in Germany by Q1 2025.

Regulatory and market pressures in the EU and Germany continue to accelerate electric vehicle adoption. The EU’s stringent CO₂ emission targets for 2035 are pushing manufacturers to prioritize BEVs and PHEVs to meet legal requirements, despite attempts to soften these rules through lobbying.

Economic context in Germany also plays a role. Although the German economy showed weak growth (+0.3% GDP YoY in Q1 2025) and soft consumer/business confidence, inflation and interest rates are stable, providing a modestly supportive macroeconomic environment for EV adoption.

Market share and consumer demand trends also favour electrified vehicles. BEVs increased their market share in Germany significantly, with a reported 58% YoY volume increase by mid-2025, while PHEVs grew by 84%. PHEVs currently play a critical role “lifting” the transition at Germany’s stage, suggesting consumer preference for hybrids as a transitional technology alongside rising BEV volumes.

The decline of internal combustion engine (ICE) vehicles is ongoing. In the first quarter of 2025, deliveries of ICE models dropped by 25%. Diesel volumes fell by 21.7% between January and March 2025, and diesel-powered cars took a 14.9% market share, a drop of 3.4pp year on year.

SUVs also enjoyed positive figures in the first quarter of 2025, with an increase of 5.6%. In March 2025, BEV registrations soared by 35.5%, capturing 16.8% of overall volumes, up 4.9 percentage points year on year. Petrol-powered cars accounted for 27.8% of overall registrations in March 2025, a 10pp drop compared to March 2024.

Commercial registrations dropped by 6% year on year in March 2025, while deliveries to private buyers improved by 0.5%. The internal combustion engine (ICE) market slumped by 26.9% in March 2025, marking its biggest monthly percentage drop since May 2022.

In conclusion, the key factors driving growth in Germany's new-car market are the strategic push by automakers (especially Chinese competitors), regulatory mandates favouring electrification, evolving consumer preferences favouring PHEVs and BEVs, and moderate economic stability in Germany during early 2025. The period also shows divergence within the EV segment itself, where PHEVs currently anchor much of the growth while BEVs steadily rise.

1. The growth of electric vehicles (EVs) in Germany's new-car market is influenced by strategic pushes from automakers, especially Chinese manufacturers like BYD, who are leading with aggressive PHEV strategies and vertical integration.
2. Regulatory and market pressures in the EU and Germany continue to accelerate EV adoption, with the EU’s stringent CO₂ emission targets for 2035 pushing manufacturers to prioritize BEVs and PHEVs to meet legal requirements.
3. Despite the overall decline in the new-car market, the total number of new-car deliveries in March 2025 was the highest since June 2024, with PHEV deliveries surging by 65.8% in March 2025, making it the best-performing powertrain in terms of year-on-year percentage growth.
4. BEVs have experienced significant growth in market share, with a reported 58% YoY volume increase by mid-2025, while PHEVs grew by 84%, playing a crucial role in "lifting" the transition at Germany's stage, suggesting consumer preference for hybrids as a transitional technology alongside rising BEV volumes.

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