Electrification on "Speed" and a Cold Shower for Tradition: The European Auto Market in January 2026

The year 2026 began with a wake-up call for the automotive giants on the “Old Continent.” While we’ve grown accustomed to promises of a smooth transition to zero emissions, the reality in showrooms in January was more of a mix of electric excitement and classic engine meltdown.

According to data recently published by ACEA (European Automobile Manufacturers' Association), new car sales in Europe (EU, EFTA and the UK) fell by 3.5% to a total of 961,382 units. However, behind this seemingly modest figure lies a tectonic shift in consumer preferences.

1. The PHEV Surprise and the Fall of Gasoline

If last year we were talking about the hegemony of gasoline, January 2026 marks the "beginning of the end" for purely thermal engines. The declines are brutal in large markets such as France (-49%) and Germany (-30%).

In this context, plug-in hybrids (PHEVs) are the absolute stars. With a spectacular growth of 32.2%, they seem to be the ideal compromise solution for Europeans who still fear the charging infrastructure for pure electrics but want to escape fossil fuel taxes.

Powertrain Type	Units Sold (Jan 2026)	Change vs. 2025	Market Share
Hybrids (HEV)	369,998	+6.4%	38.6%
Petrol	216,148	-25.7%	22.0%
Battery Electric (BEV)	189,062	+13.9%	19.3%
Plug-in Hybrid (PHEV)	99,654	+32.2%	9.8%
Diesel	68,767	-22.0%	8.1%

2. Giants in the ropes: Stellantis vs. Volkswagen Group

The battle for supremacy is getting tighter. Although the Volkswagen Group remains the market leader, the German giant is suffering from falling demand for its core brands. The only "ray of light" in the group comes from Skoda, which recorded an increase of almost 10%, managing to partially compensate for the losses of the VW brand.

At the opposite end, Stellantis defies the market trend. With a 6.7% increase, the group led by Carlos Tavares is taking advantage of the success of Fiat and Opel models, but also of the integration of new partnerships with Chinese manufacturers (such as Leapmotor), which are starting to assemble cars directly in Europe.

3. The Dacia paradox: Why did the sales of the Mioveni brand decrease?

The most surprising figure, however, comes from Dacia. Europe's favorite "low-cost" brand suffered a hard blow: a 35% drop in sales (31,819 units).

Market analyses suggest two main causes:

• "Childhood diseases" for new models: There are reports of reliability and finish issues with new generations (including the 2026 Sandero), which has dampened the enthusiasm of loyal buyers.
• Chinese Offensive: Brands like BYD and MG have started to attack Dacia's price segment with electric or hybrid models equipped with superior technology at extremely competitive prices. BYD, for example, almost tripled its sales in January compared to last year.

4. Legislative Pressure: The "Clean Corporate Vehicles" Rule

The overall market decline also comes against the backdrop of new European regulations on corporate fleets (CCVR). Starting this year, companies are required to accelerate the electrification of their fleets, and subsidies for petrol and diesel company cars have been removed in many member states. This has created a vacuum in the market as companies recalibrate their budgets for green procurement.

Tesla, although it was the pioneer of this segment, continues to lose ground in Europe, recording the 13th consecutive month of decline (-17% in January), being overtaken in terms of growth rate by traditional European manufacturers who have finally launched affordable electric models.

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The conclusion? January 2026 shows us a Europe that wants green cars, but has become much more demanding in terms of quality and price. The era of cheap "no-frills" cars seems to be fading, giving way to an unprecedented technological battle.