European sales of full-electric cars and plug-in hybrids boom, as EVs from Tesla and VW gain popularity

Sales of electrified cars outsold diesel models in Europe for the first time last year.

Combined sales of battery-electric cars and plug-in hybrid cars grew 66 percent to 2.26 million in the EU, EFTA and UK markets in 2021, data from industry association ACEA showed.

Diesel sales fell 33 percent to 2.08 million, as the powertrain's popularity continued a slide that began after Volkswagen Group's emissions-cheating scandal in 2015.

Diesel passenger cars face extinction in Europe as cities and governments impose tougher regulations to reduce tailpipe pollutants such as NOx.

Gasoline cars were still the most popular engine type but their lead is dwindling, with sales down 17 percent to 4.76 million.

Full-electric cars, which use only battery power, continued to grow in popularity, with sales up 63 percent to 1.22 million units, as models from traditional automakers such as Volkswagen challenge Tesla's dominance in the segment.

The Tesla Model 3 was Europe's top-selling battery-electric car in 2021, fighting off challenges from full-electric models such as the Volkswagen ID3 and Renault Zoe.

The sales growth reinforced Europe's position as the second-largest market for battery-electric cars after China, JATO Dynamics analyst Felipe Munoz said.

Germany was Europe's biggest market for sales of full-electric cars, followed by the UK.

The increased popularity of EVs was driven by the continued availability of generous government incentives and because automakers prioritized EV sales over gasoline and diesel vehicles amid the global shortage of semiconductors. This meant dealerships faced less disruption with supply, Munoz said.

"Over the last 10 years, pure electric cars have grown faster than any other segment, including SUVs which posted a new record last year," Munoz said in a statement.

Tesla no longer has a dominant position in the European EV market, Munoz said.

Two years ago, Tesla had a 31 percent share of the battery-electric vehicle market, thanks largely to the Model 3. In 2021, Tesla was the most popular full-electric brand but its market share fell to 13.9 percent, according to JATO data.

While Tesla was the top-selling EV brand, Volkswagen Group sold the most full-electric cars by group, according to JATO.

One in four battery-electric vehicles belonged to one of VW Group's six brands, with VW Group more than 10 points ahead of its closest rival, Stellantis, which took a 14.5 percent market share, followed by Tesla with 13.9 percent.

Plug-in hybrid boom

Sales of plug-in hybrid cars, which operate on both an internal combustion engine and a battery, rose 69 percent to 1.05 million.

Ford said last month that its Kuga Plug-In Hybrid was the best-selling plug-in hybrid vehicle of any brand across all European markets in 2021.

The Kuga's vehicle line director, Glen Goold, said the SUV met demand from customers who wanted to transition to an electrified car from a gasoline or diesel model but were not yet ready to buy a full-electric car.

The green credentials of plug-in hybrids have been criticized by environmental groups because studies have shown drivers rely more than hoped on the internal combustion engine than the battery, pushing up the vehicles' emissions.

Reuters contributed to this report