German New Car Registrations in 2025 Show Slight Growth Amid Consumer Caution

Germany's passenger car market experienced a modest recovery in 2025, with new registrations rising by 1.4% to 2.9 million vehicles, bolstered by a strong December that saw nearly a 10% increase compared to the previous year. Despite this upswing, demand remains subdued with new car sales still well below pre-pandemic figures — in 2019, 3.6 million new cars were registered, leaving a gap of 750,000 vehicles. This persistent caution is linked to economic and political uncertainties, including a weak economic environment and ongoing societal crises, which continue to influence both private and corporate buyers, according to Constantin Gall of EY.

Electrified vehicles marked the most significant advancement in the market. Pure electric cars reached 545,142 new registrations, reflecting a 43.2% year-on-year increase and now hold a 19.1% market share. Hybrid vehicles dominate with 39.5% of the market, especially plug-in hybrids, which surged by 62.3%. BMW and BYD reported notable sales increases, while Tesla saw a 48.4% decline alongside dips for Porsche and Smart. These shifts hint at evolving consumer preferences toward greener technologies, although concerns exist that the gains largely offset declines from 2024's unexpected end to environmental subsidies for electric cars.

Looking ahead, industry insiders anticipate slight growth of around 1% in 2026 if the German government swiftly reinstates support for new electric vehicle purchases. Nevertheless, the market's full recovery faces hurdles from broader macroeconomic and societal challenges, underscoring a cautious outlook for the automotive sector.